SAN FRANCISCO — From www.xbiz.com- Jim French, the founder of venerable gay adult company COLT Studio, has sued its current owners for breach of contract due to an alleged failure to pay the bulk of a $2.2 million promissory note related to the 2003 sale of the company.
He is seeking a return of all company copyrights and assets to his possession and for the court to order these assets to be sold in order to repay the note.
Jim French Studios Inc. filed the lawsuit in San Francisco Superior Court on April 13 against Prowest Media Corp. for breach of contract, naming as defendants current Prowest Media President John Rutherford, Chief Financial Officer Thomas R. Settle, among others.
Prowest Media has controlled COLT Studio since May 2003.
The suit alleges a failure to repay $1.24 million outstanding on a $2.2 million promissory note issued on May 1, 2003, upon the sale of the company by Jim French Studios to Prowest.
The court filing indicates Prowest had failed to make several payments by January 2005. That month a new promissory note for $1.84 million was executed. The new promissory note dropped the total monthly payment by 42 percent to $25,000 per month.
The note had a graduated payment plan under which the monthly payments rose over the next four and a half years to $55,000 per month. There was a final installment of $130,000 due in July.
The filing indicates Prowest stopped making payments on the revised promissory note in approximately spring 2007.
“As the old saying goes, ‘There are two sides to every story.’ We regret that Mr. French has chosen to pursue his differences legally where only lawyers will prosper,” Rutherford told XBIZ when he was reached for comment over the weekend. “Please know that after nearly 20 years in this business learning from the best, we have every intention of working our differences out.”
COLT Studio is one of gay adult’s oldest continually operating companies. French, a photographer and adult industry pioneer, founded the company in 1967.
In May 2003, French sold the company to Prowest, whose sole shareholders were Settle and Rutherford, the former president and head of production for Falcon Studios.
In addition to its COLT Studio flagship titles, subsidiary labels include Buckshot Productions, Minute Men and Olympus. The extensive COLT branded line of products includes apparel, leather gear and numerous novelties as well as cards, calendars and books.