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Movie studios want global picture of Dotcom’s assets

The New Zealand lawyer for several major Hollywood Studios says his clients want to know where Megaupload founder Kim Dotcom’s money is coming from.

Chapman Tripp’s Matt Sumpter told the High Court at Auckland today his clients want a global picture of Mr Dotcom’s assets because it is clear he lives extravagantly.

He says Mr Dotcom has said he funded the Internet Party to the tune of $4 million and promised a $US5 million bounty for information to help his case, and this shows that Mr Dotcom has some assets which aren't frozen.

Mr Sumpter is representing six major Hollywood studios including Twentieth Century Fox Film, Disney and Paramount who are taking an action in the US for copyright.

The movie studios together allege Mr Dotcom and his associates made more than $US175 million through Megaupload, which sold premium accounts and dished out cash incentives to uploaders but delivered no money to artists or their record labels or movie studios.

A parallel action is also being taken by recording companies who are represented in New Zealand by Hudson Gavin Martin founder Mark Gavin.

Negotiations have begun around freezing orders for Mr Dotcom's assets, but Mr Sumpter says since the original application, Mr Dotcom has made public statements suggesting he has further un-constrained assets.

In an urgent application heard this morning before Justice Patricia Courtney, Mr Sumpter said the court should “shed a little light” on what these assets are. 

Mr Dotcom told media he has a US$5 million bounty for information relationg to the case, and that Mr Dotcom said there would be a trust account for those funds, Mr Sumpter said.

He also told media his personal funding of the Internet Party was $3 million plus $1 million before the party was registered (the Electorial Commission website records three donations totalling $3.25 million).

“It’s quite clear to every New Zealander that Mr Dotcom has a penchant for living extravagantly,” Mr Sumpter told the court, adding that Mr Dotcom's Twitter account demonstrates that – for example Mr Dotcom took a helicopter from Coatesville for his recent Queenstown holiday.

Mr Sumpter outlined overseas and local precedent to support his contention that Justice Courtney has the jurisdiction to help the Virginia Court where the US action began.

That action has been stayed, or held off, pending other court actions against the German entrepreneur.

The High Court proceeding continues, with arguments for Mr Dotcom expected to be delivered by Simpson Grierson special counsel Tracey Walker. 

vyoung@nbr.co.nz

More by Victoria Young

Comments and questions
10

megaupload.com was only one of 6 sites that he created. One that no one seems to be talking about is megaporn.com. Wouldn't surprise me if he had made a few porn sites feeding of illegal content and had his buddies back in Asia or Europe running them for him. After all, with bitcoins around... KDC could be very well getting paid under the radar.

Fast forward 2yrs to 2016. Dotcom will be found guilty as charged ( he knows this) and the compensation he has to pay will be massive.
He may as well spend every cent he has now.
Strange its taken the Hollywood studios this long to figure out their compensation is going down the toilet.

Dotcom's affairs are far less than transparent. Does NZ really need another politician with numerous ethical/honesty questionmarks hanging over his head who might have a say in the future running of this country? Better for his legal issues to play out first to see whether he is a man of integrity. We already have too few of them in the Beehive.

Putting this in context, Hollywood executives enjoy the same or better lifestyle.

Hollywood has been exploiting artists for decades. The smart ones have figured this out, and either tour or run their own affairs.

Dotcom has done nothing more than have a better business model than these Hollywood businesses, who have been gorging excessive profits from artists for years.

Mcdonald's has been operating on high turnover low margins for decades, rather than low turnover high margins of these Hollywood businesses have. They have no one to blame but themselves. Time to get with the internet guys!

What you say might be true, but the profit they have been making is through agreement, not exploitation. No-one puts a gun to any artists head to force them to sign with a recording studio. Recording studios do not steal copyrighted material and sell it. However this is what Dotcom has condoned and/or participated in.

Good on recording studios for making huge profits, good on Apple, and Virgin Air for also making huge profits. Good on Xero and Trademe for being success stories. Long live the wealthy. Nothing justifies theft.

Just because an enterprise legally makes huge profits by taking risks that other won't, doesn't make it OK for someone else to benefit by theft of someone else's intellectual property.

The whole reason Hollywood exists is because movie studios wanted to make money by avoiding paying for patents they were using.

Today's Hollywood Accounting is a famous example of their unethical exploitation of people, including artists.

Add to that, anyone can use Google to find copyrighted content and download it, and Google makes money from advertising to these users. You can also watch copyrighted content on YouTube (owned by Google) any time of the day.

There are myriad other sites that let people store whatever files they want, and give links to these files to other people - they make money off advertising to these users, just as Mega and Google do.

The fact is, Hollywood is sponsoring this take down of Dotcom purely because they thought he would be an easier target than various others - especially Google, which is far too big for them to take on.

They also correctly surmised that NZ's politicians would fall nicely into line. They perhaps underestimated the independence and strength of our judges to stand up to illegal tactics and bullying.

A shame that this clown is in NZ. We give him so much free reign with the media and he is simply living the life of Riley here on the back of Real New Zealanders. He has ruined one politicians career and is trying to do the same with others. And for him to fund a political party is quite incredible considering what the party actually stands for. ( actually what does it stand for?) This whole scene is a nonsense and someone needs to stand back and address this sideshow with a common sense approach. The man is not a Kiwi , has instigated a bunch of damage and costs to New Zealand and seems to get into the media when there are real issues at stake. Why cant we get the German government to recall him as a faulty unit?

So apparently Dotcom is now responsible for other people's wrong actions too...

Banks was the author of his own demise.

Hardly the point I was making Horse ! Obviously you don't like Banks but that's not the issue just an example. Lets stay on track!

I love how everyone already knows the outcome of a legal case which has yet to exist.

But the theory that he's blowing it all like Sardanapalus is every bit as entertaining as the guy himself.

(I knew that stage one art history paper would come in handy one day).