In re: FRANCHISE PICTURES LLC, et. al., Debtor(s). MORGAN CREEK PRODUCTIONS, INC., Plaintiff(s), v. FRANCHISE PICTURES LLC, a Delaware limited liability company and FRANCHISE ENTERTAINMENT LLC, a California limited liability company, Defendant(s), OFFICIAL COMMITTEE OF UNSECURED CREDITORS, Intervenor-Defendant., 389 B.R. 131

Summary

Defendants agreed to produce eight motion pictures for distribution by plaintiff. Plaintiff was also granted a security interest in certain distribution rights in the motion pictures and in various collateral. Defendants subsequently delivered the eight motion pictures. Plaintiff filed with the U.S. Copyright Office a separate copyright mortgage on each of the eight motion pictures. A state court awarded plaintiff damages against defendants for breach of contract. In connection with the state court judgment, plaintiff filed an Order to Appear for Examination (ORAP) Lien. The court held that the copyrights encumbered by the ORAP Lien were unperfected because plaintiff failed to record the ORAP Lien in the Copyright Office. The court also held that the copyright mortgages did not create a lien on any property of defendants because the collateral was limited to revenues received from distribution of the motion pictures and certain proceeds and other property derived from or arising out of...