A Nevada judge has denied a request by the ex-CEO of Medient Studios for a preliminary injunction and court-appointed receiver to dissolve his former company, a small victory for the beleaguered Effingham County entertainment company and its board of directors.
A Nevada state court on Wednesday ruled against Manu Kumaran, who filed suit after the company’s board of directors ousted him on June 9. The Washoe County Court ruling lifts a temporary restraining order in effect since July 9.
Kumaran’s attorney, Jason Wiley, called the ruling a minor setback, but said he’s confident with the claims they have remaining. A tentative trial date is set for April of next year.
Wiley said they would’ve liked for a neutral third party to take control of the company, but the judge said doing so may push Medient into a more precarious financial position and put it in jeopardy of bankruptcy.
Both Kumaran and Medient’s new CEO, Jake Shapiro, attended Wednesday’s hearing in Reno, Nevada.
Shapiro first resurfaced last week to give an update on the company’s status to the Effingham County Industrial Development Authority.
Shapiro said the company has hired a reputable architecture firm and plans to proceed with scaled-down plans for a movie studioplex on the IDA’s 1,500-acre property at Interstate 16 and Old River Road.
The IDA has already spent upwards of $270,000 on Medient, according to a public records request, as well as $800,000 for a well on the property.
Shapiro called Kumaran’s lawsuit a case of “sour grapes” and said the company has now paid back vendors in full. He said he also plans to move Medient’s headquarters from a small office park off Chatham Parkway to Effingham County as construction plans draw closer.
Despite the legal victory, Medient’s stock remains troubled. After being temporarily suspended by the Securities and Exchange Commission earlier this month, the stock is now listed on the grey market at around .0004 per share.
Grey market securities are not traded or quoted through a stock exchange or over-the-counter broker-dealer network, meaning there is no central place to take orders and the buyer must blindly put in an offer to buy shares in a company for the amount a seller is asking.
The company also faces a shareholder lawsuit and another suit from a former employee. Former Savannah Film Services Director Jay Self filed a suit earlier this month seeking $60,000 in backpay and compensation for stock.