PRYOR CASHMAN LLP

Mark R. Jacobs (MJ-6248)

Gerald A. Gordon (GG-1590)
410 Park Avenue
New York, New York 10022
Tel: (212) 421-4100

Attorneys for Jonathan Smith p/k/a Lil Jon,

Lil Jon Productions, Inc. f/s/o Jonathan Smith
p/k/a Lil Jon, BME Recordings, LLC, and Rob
McDowell

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------x
In re: :
: Chapter 11
TEEVEE TOONS, INC. :
d/b/a TVT RECORDS, : Case No. 08-10562 (ALG)
:
Debtor. :
-------------------------------------------------------x

OBJECTION OF JONATHAN SMITH P/K/A LIL JON, LIL JON PRODUCTIONS,

INC. F/S/O JONATHAN SMITH P/K/A LIL JON, BME RECORDINGS, LLC AND
ROB MCDOWELL TO THE DEBTOR’S NOTICE OF PROPOSED ASSUMPTION
AND ASSIGNMENT OF EXECUTORY CONTRACTS AND UNEXPIRED
LEASES
(Re: Docket Number 241)

Jonathan Smith p/k/a Lil Jon (“Lil Jon”), Lil Jon Productions, Inc. (“Productions”)

f/s/o Lil Jon, BME Recordings, LLC (“BME”) and Rob McDowell (“McDowell”)

(collectively, the “Creditors”), by and through its undersigned counsel, for its objection

(the “Cure Objection”) to the proposed cure amount scheduled in the Debtor’s Notice of

Proposed Assumption and Assignment of Executory Contracts and Unexpired Lease, filed

on May 28, 2008 (the “Cure Notice”) (Docket Number 241), respectfully represents:

General Background

1. Lil Jon is, among other things, a recording artist and record producer whose
services are furnished by his furnishing companies, Productions and BME, and whose

business endeavors are managed by his manager, McDowell.

2. On February 19, 2008 (the “Petition Date”), TeeVee Toons, Inc. d/b/a TVT

Records (the “Debtor”) filed a voluntary petition for relief in this Court under chapter 11 of

title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”).

3. On May 28, 2008, the Debtor filed the Cure Notice listing the executory

contracts and unexpired leases, including, as more fully set forth herein, certain agreements

to which the Creditors are a party, which the Debtor may seek to assume and assign in

connection with the sale of substantially all of its assets and, by its calculations, any

corresponding proposed cure amounts in connection with the assumption and assignment

of such contracts or leases.

4. BME and McDowell are also listed as “payees” pursuant to certain

executory contracts listed in the Cure Notice. However, the Cure Notice is so vague that

the Creditors cannot be certain the Debtor has identified executory contracts to which the

Creditors are parties. As such, the Creditors cannot accurately determine (a) which of their

agreements with the Debtor match the agreements generically listed in the Cure Notice and

(b) which of the Creditors are the “payees” thereunder to which the Debtor owes a cure

obligation. Because of the Debtor’s failure to clearly identify executory contracts listed in

the Cure Notice and the relevant “payee,” this Cure Objection is asserted on behalf of the

Creditors, collectively and in their individual capacities, to reserve all of the rights of the

Creditors that could be affected by the proposed cure amounts set forth in the Cure Notice.

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 The Agreements

The Artist Agreement

5. On or about February 6, 2001, BME entered into an agreement, as amended

on or about November 12, 2003 and February 1, 2006 (the “Recording Agreement”), with

the Debtor to engage BME’s recording artist Lil Jon & The East Side Boyz, which is

comprised of three individuals, including Lil Jon. The Recording Agreement required Lil

Jon & The East Side Boyz to produce and deliver to the Debtor certain master recordings

(the “Lil Jon Masters”), with recording costs to be paid by the Debtor. The Recording

Agreement also provides that, subject to certain qualifications, the Debtor would pre-

approve a certain number of “loan-outs” of Lil Jon to third-party labels in order to render

artistic performances.

6. As consideration for the services of BME and Lil Jon, among others, the

Recording Agreement provides for the payment of royalties by the Debtor to BME and Lil

Jon, calculated in accordance with the Recording Agreement. Royalties pursuant to the

Recording Agreement accrue in connection with the Lil Jon Masters and certain masters

produced in connection with the loan-outs where Lil Jon provided his services with respect

to recordings of such recording artists, including, but not limited to, Oobie, Chyna, The

East Side Boys1 and Pitbull. In connection with the masters produced in connection with

the loan-outs, Lil Jon is also entitled to certain fees, as more fully set forth in the

Recording Agreement.

7. Also as consideration for the services of BME and Lil Jon, among others,

the Recording Agreement provides for the payment by the Debtor to BME, Lil Jon and

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The Recording Agreement employs both “Boys” and “Boyz” in the title of the group “The East Side Boys,”
however, upon information and belief, these parties are the same.

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McDowell of certain advances, as more fully set forth in the Recording Agreement.

8. Additionally, the Recording Agreement afforded BME the right to perform

audits of the books and records of the Debtor, subject to certain limitations more fully set

forth in the Recording Agreement, with respect to the payment of royalties to BME and/or

Lil Jon.

9. The Debtor breached the Recording Agreement in several ways, but in

principal part by reducing the royalties due to Lil Jon by wrongfully deducting hundreds of

thousands of dollars (if not millions of dollars) in legal fees supposedly incurred and paid

by the Debtor and for settlement costs from the amounts payable to Lil Jon. These

unilateral offsets have consistently reduced the Debtor’s purported obligation to Lil Jon to

zero (indeed, they have so dramatically reduced the obligations that Lil Jon is purportedly

in an unrecouped position despite the sales of millions of records), and as a result Lil Jon

has not been paid royalties throughout the duration of the Recording Agreement.

10. Critically, the amount necessary to cure this breach is impossible to discern

because the Debtor failed to provide certain royalty statements to Lil Jon (this is, of course,

itself yet another breach of the Recording Agreement) and those that it has provided have

not been verified. The royalty statements the Debtor did provide show that at least

$500,000 was wrongfully withheld from the royalties owed to Lil Jon under the Recording

Agreement for the legal fees and settlement costs of a certain lawsuit brought by Michael

Sterling.

11. The Debtor’s conduct with respect to the Sterling matter illustrates the

impropriety of the Debtor’s offsets against Lil Jon’s royalties. Moreover, since it now also

appears that the legal fees supposedly incurred by the Debtor and deducted from Lil Jon’s

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royalties were not actually paid to the Debtor’s counsel in the Sterling matter, the offsets

may in fact be fraudulent.

12. Mr. Sterling sued Lil Jon and the Debtor over the use of a song titled

“Lovers and Friends” which appeared on one of the albums produced under the Recording

Agreement. During the production of the album in question, Lil Jon was told by

representatives of the Debtor that the license for this song had been secured by the Debtor.

However, the Debtor did not procure a license from Mr. Sterling, yet the Debtor

nonetheless released the album.

13. The Debtor then compounded its misconduct when Mr. Sterling raised

questions about the use of his song. Instead of entering into a simple license agreement as

Mr. Sterling sought, the Debtor refused to enter into a license for the track and insisted

instead on acquiring ownership of Mr. Sterling’s interest in the song. Mr. Sterling refused

and due exclusively to the Debtor’s actions, elected to prosecute a copyright claim. Still

not content to reach a reasonable economic resolution (undoubtedly because the Debtor

figured it could either pay Lil Jon his royalties or use his royalties to litigate), the Debtor

then rejected an early offer to settle the dispute for a nominal sum, forcing pointless

litigation that eventually led to a settlement for millions of dollars.

14. Despite being responsible for everything that gave rise to both to Mr.

Sterling’s copyright claim and the ultimate absurdly unnecessary and expensive settlement,

the Debtor maintains that Lil Jon is nonetheless required to indemnify the Debtor in full for

all costs associated with the infringement suit brought by Sterling and brought on by the

Debtor’s unilateral and irresponsible behavior. Given that the Debtor is wholly

responsible for the dispute regarding the “Lovers and Friends” song, and that the Debtor

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mismanaged the resolution of this dispute so that it cost millions of dollars to resolve, and,

most importantly, it appears that the Debtor has not paid the legal fees in the Sterling

matter (the Debtor’s former counsel is one of the largest creditors of the estate), the

“offset” of these fees and settlement costs is effectively a conversion of monies due and

owing to Lil Jon and/or BME.

15. The Debtor also failed to reimburse Lil Jon for certain recording costs that

Lil Jon advanced in connection with an as-yet unreleased album, specifically certain studio

fees and lodging fees for studio musicians and recording personnel. These fees are the

Debtor’s clear obligation under the Recording Agreement, and to date they have not been

reimbursed to Lil Jon.

The Producer Agreements

16. The YYT Producer Agreement: On or about September 27, 2005,

Productions entered into a producer agreement (the “YYT Producer Agreement”) with

ColliPark Music, Inc. (“ColliPark”) with respect to the engagement of Lil Jon’s non-

exclusive services to produce one master recording embodying the musical composition

tentatively entitled “Put That Thang Down” (the “YYT Master”), featuring the

performances of ColliPark’s recording artist, Ying Yang Twins (“YYT”). It was agreed

that the YYT Master was to be recorded pursuant to and subject to the exclusive recording

agreement and distribution agreement by and between ColliPark, YYT and the Debtor.

17. In consideration for the services of Lil Jon in connection with the

production of the YYT Master, Lil Jon was entitled to the payment of royalties (the “YYT

Royalties”), calculated in accordance with the YYT Producer Agreement.

18. Royalties under the YYT Producer Agreement, were to be made payable by

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the Debtor pursuant to a letter of direction (the “YYT Direction Letter”), executed by

ColliPark for the benefit of Lil Jon, which directed the Debtor to pay the YYT Royalties.

Upon information and belief, the Debtor is not current in the payment of the YYT

Royalties.

19. Additionally, the YYT Producer Agreement afforded Lil Jon the right to

perform an audit of the books and records of the Debtor, subject to certain limitations as

more fully set forth in the YYT Producer Agreement, with respect to the payment of the

YYT Royalties.

20. In addition to the payment of the YYT Royalties, Lil Jon was also entitled

to a producer’s fee in the amount of $24,000.00 (the “YYT Advance”), which was to be

paid upon the full execution of the YYT Producer Agreement. Upon information and

belief, the YYT Advance has not been paid by the Debtor.

21. The 2004 Pitbull Producer Agreement: In or about August 2004,

Productions entered into a producer agreement (the “2004 Pitbull Producer Agreement”)

with The Diaz Brothers Music Group, Inc. (“DBMG”) f/s/o Armando Perez p/k/a Pitbull

(“Pitbull”) with respect to the engagement of Lil Jon’s non-exclusive personal services to

produce several master recordings embodying musical compositions more fully described

in the 2004 Pitbull Producer Agreement (the “2004 Pitbull Masters”) featuring the

performances of DBMG’s recording artist, Pitbull. It was agreed that the 2004 Pitbull

Masters were to be recorded pursuant to and subject to the exclusive artist recording

agreement between the Debtor and Pitbull, dated as of October 23, 2003 (the

“Pitbull/Debtor Recording Agreement”).

22. In consideration for the services of Lil Jon in connection with the

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production of the 2004 Pitbull Masters, Lil Jon was entitled to the payment of royalties

(the “2004 Pitbull Royalties”), calculated in accordance with the 2004 Pitbull Producer

Agreement.

23. Additionally, the 2004 Pitbull Producer Agreement afforded Lil Jon the

right to perform an accounting and audits of the Debtor’s books and records, subject to

certain limitations as more fully set forth in the 2004 Pitbull Producer Agreement, with

respect to the payment of the 2004 Pitbull Royalties.

24. In addition to the payment of royalties, upon the execution of the 2004

Pitbull Producer Agreement, Lil Jon was also entitled to an advance in the aggregate

amount of $100,000.00 (the “2004 Pitbull Advance”).

25. In connection with the 2004 Pitbull Producer Agreement, through a letter of

direction, annexed to the 2004 Pitbull Producer Agreement as Exhibit C (the “2004 Pitbull

Direction Letter”), DBMG directed the Debtor to pay the 2004 Pitbull Royalties and the

2004 Pitbull Advance to Lil Jon on DBMG’s behalf. Upon information and belief, neither

the 2004 Pitbull Royalties nor the 2004 Pitbull Advance have been paid by the Debtor.

26. The 2006 Pitbull Producer Agreement: On or about October 31, 2006,

Productions entered into a producer agreement (the “2006 Pitbull Producer Agreement”)

with Famous Artist Entertainment, Inc. (“FAE”) f/s/o Armando Perez p/k/a Pitbull

(“Pitbull”) with respect to the engagement of Lil Jon’s non-exclusive personal services to

produce several master recordings embodying musical compositions more fully described

in the 2006 Pitbull Producer Agreement (the “2006 Pitbull Masters”) featuring the

performances of FAE’s recording artist, Pitbull. It was agreed that the 2006 Pitbull

Masters were to be recorded pursuant to and subject to the Pitbull/Debtor Recording

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Agreement.

27. In consideration for the services of Lil Jon in connection with the

production of the 2006 Pitbull Masters, Lil Jon was entitled to the payment of royalties

(the “2006 Pitbull Royalties”), calculated in accordance with the 2006 Pitbull Producer

Agreement.

28. Additionally, the 2006 Pitbull Producer Agreement afforded Lil Jon the

right to perform an audit of the Debtor’s books and records, subject to certain limitations

as more fully set forth in the 2006 Pitbull Producer Agreement, with respect to the

payment of the 2006 Pitbull Royalties.

29. In addition to the payment of royalties, upon the execution of the 2006

Pitbull Producer Agreement, Lil Jon was also entitled to an advance in the amount of

$80,000.00 (the “2006 Pitbull Advance”).

30. In connection with the 2006 Pitbull Producer Agreement, through a letter of

direction, annexed to the 2006 Pitbull Producer Agreement as Exhibit C (the “2006 Pitbull

Direction Letter”), FAE directed the Debtor to pay the 2006 Pitbull Royalties and the 2006

Pitbull Advance to Lil Jon on DBMG’s behalf. Upon information and belief, neither the

2006 Pitbull Royalties nor the 2006 Pitbull Advance have been paid by the Debtor.

31. The 2007 Pitbull Producer Agreement: On or about November 27, 2007,

Productions entered into a producer agreement (the “2007 Pitbull Producer Agreement”)

(together with the 2004 Pitbull Producer Agreement and the 2006 Pitbull Producer

Agreement , the “Pitbull Producer Agreements”) with FAE with respect to the engagement

of Lil Jon’s non-exclusive personal services to produce several master recordings

embodying musical compositions more fully described in the 2007 Pitbull Producer

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Agreement (the “2007 Pitbull Masters”) featuring the performances of FAE’s recording

artist, Pitbull. It was agreed that the 2007 Pitbull Masters were to be recorded pursuant to

and subject to the Pitbull/Debtor Recording Agreement.

32. In consideration for the services of Lil Jon in connection with the

production of the 2007 Pitbull Masters, Lil Jon was entitled to the payment of royalties

(the “2007 Pitbull Royalties”), calculated in accordance with the 2007 Pitbull Producer

Agreement.

33. Additionally, the 2007 Pitbull Producer Agreement afforded Lil Jon the

right to perform an audit of the Debtor’s books and records, subject to certain limitations

as more fully set forth in the 2007 Pitbull Producer Agreement, with respect to the

payment of the 2007 Pitbull Royalties.

34. In addition to the payment of royalties, upon the execution of the 200

Pitbull Producer Agreement, Lil Jon was also entitled to an advance in the amount of

$40,000.00 (the “2007 Pitbull Advance”).

35. In connection with the 2007 Pitbull Producer Agreement, through a letter of

direction, annexed to the 2007 Pitbull Producer Agreement as Exhibit C (the “2007 Pitbull

Direction Letter”) (together with the 2004 Pitbull Direction Letter and the 2006 Pitbull

Direction Letter, the “Pitbull Direction Letters”), FAE directed the Debtor to pay the 200

Pitbull Royalties and the 2007 Pitbull Advance to Lil Jon on DBMG’s behalf. Upon

information and belief, neither the 2007 Pitbull Royalties nor the 2007 Pitbull Advance

have been paid by the Debtor.

36. The Teedra Moses Producer Agreement and the Naughty by Nature

Producer Agreement: Upon information and belief, Lil Jon entered into separate

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producer agreements (the “Moses and NBN Producer Agreements”) with music recording

artists Teedra Moses (“Moses”) and Naughty by Nature (“NBN”) with respect to the

engagement of Lil Jon’s non-exclusive personal services to produce several master

recordings (the “Moses and NBN Masters”) embodying musical compositions featuring

the performances of Moses and NBN.

37. Upon information and belief, as consideration for the services of Lil Jon in

connection with the production of the Moses and NBN Masters, Lil Jon may be entitled to

the payment of royalties (the “Moses and NBN Royalties”), calculated in accordance with

the Moses and NBN Producer Agreements.

38. Additionally, upon information and belief, the Moses and NBN Producer

Agreements may have afforded Lil Jon the right to perform an audit of the Debtor’s books

and records, subject to certain limitations as more fully set forth in the Moses and NBN

Producer Agreements, with respect to the payment of the Moses and NBN Royalties.

39. Upon information and belief, in addition to the payment of the Moses and

NBN Royalties, upon the execution of the Moses and NBN Producer Agreements, Lil Jon

may also be entitled to certain advance payments (the “Moses and NBN Advances”)

(together with the Pitbull Advances, the “Advances”).

40. Upon information and belief, neither the Moses and NBN Royalties nor the

Moses and NBN Advances have been paid by the Debtor.

The Compilation Album Agreements and Master Use Licenses

41. In addition to the foregoing, the Cure Notice also lists several “compilation

album agreements (agreements with compilation licensors, if applica[b]le, and master use

licenses)” (the “Compilation Album Agreements”) between the Debtor and Lil Jon. Each

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of the Compilation Album Agreements is listed in generic terms but with little specific

identifying information. For each of the Compilation Album Agreements, the Cure Notice

provides that Lil Jon is the “payee” and nothing more, however, the Agreements are listed

as executory contracts which the Debtor may seek to assume and assign in connection with

the sale of substantially all of its assets.

42. In addition to the foregoing, the Cure Notice also lists several “Master Use

Licenses” (the “Master Use Licenses”) (together with the Recording Agreement, the YYT

Producer Agreement, the YYT Direction Letter, the Pitbull Producer Agreements, the

Pitbull Direction Letters, the Moses and NBN Producer Agreements and the Compilation

Album Agreements, the “Agreements”) featuring the performances of Lil Jon. Each of the

Master Use Licenses is listed in generic terms but with little specific identifying

information. For each of the agreements “Image Entertainment” is listed as the payee. It

can be supposed that “Image Entertainment” refers to “Mirror Image Entertainment,”

which was Lil Jon’s first record label. There have been ongoing factual disputes about the

true ownership of such Masters as the Debtor is well aware. Due to the fact that neither Lil

Jon nor BME have any record of these Master Use licenses, they are unable to properly

ascertain whether the licenses were properly executed or even paid.

43. Based on the Cure Notice, it is not certain whether the Debtor is fully aware

of what agreements or rights it has and, instead, is waiting to see what objections are made

before making a reasonable attempt to further identify and reconcile the proposed cure

amounts.

44. Given the vague terms used by the Debtor in the Cure Notice, Lil Jon

cannot be certain the Debtor has even identified executory contracts to which Lil Jon is a

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party. As such, Lil Jon cannot accurately determine which of the Compilation Album

Agreements or Master Use Licenses with the Debtor match the agreements generically

listed in the Cure Notice and, therefore, are unable to specifically address the deficiencies

of the Cure Notice, except to object to the proposed Cure Amount listed in the Cure

Notice.

Objections to Proposed Cure Amount

45. The Creditors do not agree that the proposed cure amounts listed in the Cure

Notice regarding the Agreements accurately reflect the outstanding cure amounts due and

owing to the Creditors, however, in no event should such cure amounts be any less than

(and is likely to be significantly higher than) as specifically set forth herein by the

Creditors.

46. As previously set forth, each of the Agreements is listed in generic terms,

leaving the identification of exactly which agreements actually comprise the agreements

included in the Cure Notice entirely to the guesswork of the Creditors. Based on the Cure

Notice, it is not even certain whether the Debtor is fully aware of what agreements or

rights it has and, instead, is waiting to see what objections are made before making a

reasonable attempt to further identify and reconcile the cure amounts.

47. Without access to the Debtor’s books and records, including records

pertaining to its sales of recordings, manufacturing records, inventory records and other

pertinent information that would enable the Creditors to ascertain whether and to what

extent the Debtor has properly accounted to the Creditors (or accounted at all), the

Creditors cannot determine the accurate cure amounts corresponding to the relevant

Agreements. Without knowing what the Debtor did and did not pay to its attorneys in

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connection with the offsets it has claimed against Lil Jon’s royalties, the full extent of the

Debtor’s conversion of monies owed to Lil Jon cannot be fully determined. Without more

specific information identifying the Agreements and some level of shared effort to

reconcile the proposed cure amounts with the Debtor, the Creditors cannot reach a more

accurate conclusion regarding the proposed cure amounts.

48. As previously set forth, in its current state, the Cure Notice appears to

represent only the Debtor’s minimal efforts to satisfy the deadline established in this case

for filing an assumption and assignment notice and then to simply wait and see whether

contract counterparties object before making a more substantive attempt to accurately

determine what executory contracts it has and the accurate cure amounts thereto. Pursuant

to Section 365(b)(1) of the Bankruptcy Code (“Section 365(b)(1)”), a debtor can only

assume an executory contract if no default exists. In the event a default has occurred, the

debtor is required to cure the default as a predicate to assuming the contract. The Cure

Notice filed by the Debtor is nothing more than a half-hearted effort to simulate a real

effort to satisfy the relevant legal standard, which should not be left unchallenged as to its

accuracy.

49. Because the accuracy of the proposed cure amounts in connection with the

Agreements cannot be determined, the Debtor cannot claim to have satisfied the

requirements of Section 365(b)(1), which requires the cure, in full, of all outstanding

defaults or amounts due under an executory contract or unexpired lease to be assumed and

assigned. The Debtor cannot consummate any proposed assumption and assignment of the

Agreements unless and until it properly identifies the amounts of such cure obligations and

affords the Creditors the opportunity to determine whether the alleged cure amounts are

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accurate. Only then, once such amounts are agreed upon and such amounts are paid in full,

can the relevant Agreements be assumed and assigned (assuming that a cure can be

effected or that the Agreements were not terminated prior to the commencement of the

Debtor’s chapter 11 case). As such, the Creditors object to the entirety of the Cure Notice.

50. The Creditors reserve the right to (a) amend or supplement this Cure

Objection, (b) object to the potential assignment of the Agreements on any other basis and

(c) asserts all of its rights and remedies against the Debtor.

WHEREFORE, the Creditors respectfully request that the Court (a) condition any

assumption and assignment of the Agreements on (i) the full and accurate identification of

the Agreements, (ii) payment in full of the outstanding amounts due to the Creditors in

compliance with Section 365 of the Bankruptcy Code and (iii) compliance with any other

applicable law and (b) grant such other and further relief as the Court deems just and

proper.

Dated: June 13, 2008

New York, New York

PRYOR CASHMAN LLP

By: /s/ Mark R. Jacobs

Mark R. Jacobs (MJ-6248)
Gerald A. Gordon (GG-1590)
410 Park Avenue
New York, New York 10022
Tel.: (212) 421-4100

Attorneys for Jonathan Smith p/k/a Lil Jon,

Lil Jon Productions, Inc. f/s/o Jonathan Smith
p/k/a Lil Jon, BME Recordings, LLC, and
Rob McDowell

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