Dotcom spars with studios over assets

MONEY MAN: Kim Dotcom at an Internet Party function in Auckland over the weekend.
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MONEY MAN: Kim Dotcom at an Internet Party function in Auckland over the weekend.

Kim Dotcom and a collection of Hollywood's largest music and film studios that have filed a lawsuit against the internet entrepreneur are trying to agree on conditions for keeping Dotcom's assets frozen in a bid to avoid another lengthy and expensive hearing.

Four music studios recently joined six Hollywood film studios in their bid to freeze Kim Dotcom’s assets.

The application was made pending the outcome of two other lawsuits, one lodged by the studios against Dotcom in April and one court of appeal case filed by the Crown to keep Dotcom's assets frozen.

Warner Music Group, UMG Recordings, Sony Music Entertainment and Capital Records are the music studios involved.

The six film studios involved are Twentieth Century Fox Film Corporation, Disney Enterprises, Paramount Pictures Corporation, Universal City Studios Productions, Columbia Pictures Industries, and Warner Bros Entertainment.

At today's hearing in the High Court at Auckland Justice John Fogarty said a contested hearing on the studios' grounds for the freezing orders would mean using the High Court's "scarce resources".

The film studios' lawyer Mark Gavin and the music studios' lawyer Matt Sumpter said the application was an important matter in principle that should be argued.

However, Dotcom's lawyer Robert Gapes said a hearing on the matter would be "unnecessary and unwarranted".

"It's just a complete waste of everyone's time."

For now Dotcom's assets remained frozen and Gapes said his client had offered to continue with the status quo as long as the studios put up security for costs, to cover costs if they were unsuccessful in their case, and security for the undertaking to cover damages Dotcom could incur due to the freezing orders stopping his access to capital if it turned out the freezing order was wrongly imposed.

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Dotcom was asking for $250,000 in security from the film studios and $250,000 from the music studios.

Justice Fogarty said the $500,000 in security was "peanuts" for some of the wealthiest corporations in the United States.

"On the total scale of the media industry we're talking small change."

The case has been adjourned until June 26 to give the parties time to try and independently agree on conditions.

This comes as a separate New Zealand action to keep Dotcom's assets frozen is set to go another round in the courts.

Dotcom's assets were seized during the 2012 raid on his Coatesville mansion near Auckland, and the High Court last month denied the Crown's application to extend the freezing orders while he awaits an extradition hearing.

The Crown has appealed that decision, and that is to be heard on July 30.

In April the film studios filed a law suit against Dotcom in the US District Court for the Eastern District of Virginia, alleging Dotcom had "facilitated, encouraged, and profited" from illegal file-sharing on the Megaupload site.

The studios have also filed applications to freeze Dotcom's money in the United States and Hong Kong.

If the studios are successful in their application it would stop Dotcom legally disposing of his assets if they were released to him.

Meanwhile, Dotcom will be heading to the Supreme Court on Wednesday and Thursday to appeal a Court of Appeal decision that ruled the raid on his mansion was legal, following an earlier High Court decision that deemed the raid to be illegal.

The US Government is seeking to extradite Dotcom to face charges of copyright conspiracy, racketeering and money-laundering allegedly carried out by his file-sharing company, Megaupload. 

 - Stuff

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