According to Anime News Network, FUNimation Entertainment filed a lawsuit in the district court of Harris County, Texas against CEO and co-founder of ADV Films John Ledford, including companies ADV Films, AEsir Holdings, Sxion 23 (Section23 Films), Valkyrie Media Partners, Seraphim Studios, Sentai Filmworks, Sentai Holdings, and Unio Mystica Holdings (Switchblade Pictures) for breach of contract and other claims on November 4, 2011. According to the lawsuit, FUNimation claims that the defendants owe FUNimation "an amount to be proven at trial but currently estimated" at approximately US $8 million.

The lawsuit alleges that FUNimation became a creditor of ADV in regard to a debt owed to ARM corporation by ADV. FUNimation claims that ARM gave them the right to enforce ARM's agreement with ADV in regard to the debt ADV owed ARM, making FUNimation a creditor, and that ADV never paid this debt, instead selling its assets to several companies owned by former ADV executives.

The suit goes on to claim that ADV's transfer of assets "was made with the intent to defer, hinder or defraud the creditors of ADV," including Funimation, and that the new companies "succeeded ADV's contractual liability" in regard to the debt. FUNimation is requesting that the court declare ADV's transfer of assets "as null, voided and without effect," restoring those assets to the parent company, and is also requesting a jury trial.

On December 23, Sentai Filmworks, Seraphim Studios, Sentai Holdings, Valkyrie Media Partners, Unio Mystica Holdings, AEsir Holdings, and Section23 Films filed a counterclaim disputing these charges, claiming that they do not have a contract with Funimation and are not liable to the company. They claim that the companies did not exist when FUNimation acquired the rights from ARM to enforce ADV's contract with ARM, and in addition, the companies claim that FUNimation's lawsuit was filed after the two-year statute of limitations and that Funimation was not involved with the original contract and cannot claim any direct damages.

The first pre-trial meeting is currently scheduled for October 5, 2012.

Source: ANN