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Paramount Slams Wall Street In Financing Lawsuit

Paramount Slams Wall Street In Financing LawsuitParamount Slams Wall Street In Financing Lawsuit

Paramount Pictures claims that it was the victim of a fraud and conspiracy involving JP Morgan and it’s not going to take it anymore. “Paramount Pictures Corporation brings this Cross-Complaint against Content Partners LLC and its affiliate seeking redress for a years-long scheme by Content Partners and Wall Street investment bank JPMorgan Chase Bank, N.A. to defraud Paramount through an unlawful and secret assignment of rights in connection with 25 Paramount motion pictures,” says the cross complaint (read it here) filed Thursday in LA Superior Court in Santa Monica by the studio. “The cross-complaint seeks relief for a contrived attempt to frustrate Paramount’s rights and tarnish its reputation in relation to a series of film financing transactions, a Paramount spokesperson told me today.

Calling Content Partners as “the Hollywood equivalent of a patent troll,” the dense legal action this week comes in response to a $45 million breach of contract and fraud suit that the asset management group brought against Paramount in 2010 over profit participation on films such as Face/Off and The Truman Show. Content Partners claimed that the studio played fast and loose with paying out money it owed. The 2010 case had been winding its way through the courts and the discovery process. It was scheduled to go to trial later this month but delayed because the judge retired. Now Paramount has fired back and set a whole new legal saga in motion. The jury trial seeking complaint filed Thursday claims intentional interference with contractual relations, fraud, misappropriation of trade secrets, unfair business practices and civil conspiracy. Though mentioned throughout the complaint as being deeply involved in the alleged fraud and other claims, J.P. Morgan are not actually named as a defendant in this week’s filing.Why is this lawsuit important? Because, as Deadline’s Nikki Finke has previously reported, the way that Hollywood studios finance their pictures is very important to the overall health of the industry. It’s not crucial for survival, but it does let moguls sleep sounder at night. That’s why Fox has Dune, Warner Bros has Legendary (though for how long?), Disney had Kingdom, both Sony and Universal had Relativity for a time, etc. Under normal circumstances, No overall financial deal places Paramount’s parent company Viacom almost solely on the hook for underwriting new slates of pictures, which is like a tightrope walker working without a net. Remember what happened to the Wallendas?

And, in this case directly, there are millions at stake “Since the fall of 2007, Content Partners has knowingly and intentionally interfered with Paramount’s contractual relationships, misappropriated its trade secrets, and improperly received and retained more than $35 million in payments by Paramount. Paramount is entitled to disgorgement of those amounts and to recovery of the damages that continue to accrue as a result of Content Partners’ wanton misconduct,” the complaint says.

Paramount are represented by Richard Kendell, Robert Klieger, Philip Kelly and Randall Jackson of LA firm Kendall Brill & Klienger. Marty Singer of Lavely & Singer represents Content Partners. 

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