When it comes to big-budget blockbusters it is almost extra important that all finance contracts be checked thoroughly and kept adhered to. Not that a smaller budget movie should be dealt with sloppily, but it’s just the financial implications if something does go wrong are much greater with blockbusters.
We’ve already seen what happens with the whole Watchmen Fox/Warner Bros. fiasco.
Well it seems something has gone very wrong on the financial front with the highly anticipated Terminator Salvation, as two of the producers, Derek Anderson and Victor Kubicek are being sued for $160 million.
Before I get into my opinion on this matter, here is the basic info on what’s happening with the case:
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Producer Moritz Borman claims he helped arrange for fellow producers Anderson and Kubicek to acquire the rights to the Terminator franchise for their production company Halcyon Co back in 2007. Not only did it give the two full rights over the production of Terminator Salvation, but also any future sequels they may want to make, as well as any merchandising and licensing.
Borman claims financial backing for the movie was secured through investment fund Pacificor LLC in exchange for approval rights over the movie and all creative decisions, and in return he would get a $5 million fee.
However Borman says the pair failed to honor their initial agreement, essentially “hijacking” the production in July of last year and didn’t pay him his $2.5 million fee he was due at that point in time. The legal document has been released and reads:
“Notwithstanding the fact that defendants obtained the substantial franchise rights and assets through Borman, Anderson and Kubicek failed to honor their assurances, representations and contractual obligations to Borman. Defendants’ egregious fraud, bad faith conduct and refusal to abide by their contracts has led to the filing of this lawsuit.”
“It also came to light that Anderson and Kubicek did not have the means to finance the picture, had defaulted on numerous loans and owed over $1 million to creditors on the picture.”
And now Borman is seeking a whopping $160 million in damages through the LA courts.
Okay let me start of my saying that if these two producers did in fact violate the terms of their agreement with Borman, then he is absolutely 100% right for filing a lawsuit against them. No matter the amount of money, whether it be $1 or $10 million, if it was in the contract as his fee then that’s what they owe him, simple as that.
However…
Why in the hell Borman is trying his luck at $160 million, over 30 times what was originally in his contract for him to receive? Damages? What damages? I understand that naturally someone is going to seek after a lot more money than they were originally contractually obligated to receive if the other party violates the contract, but that is a brutally high number to go after.
Now there’s no word yet if a judge is even going to entertain the notion of Borman getting that amount of money for his “trouble,” but I would be inclined to say there’s no way he’ll get that amount. However I think, and this is going along with the fact that Borman does actually have a case and isn’t talking nonsense, that he will get awarded a fair bit more than was his original fee.
My question then is: Whose pocket will this money come out of? The two producers? Surely they don’t have that kind of money considering they had to go elsewhere to get financing for the film. Is there any chance the judge, by request of Borman or not, will seek the money from the studio releasing the film (perhaps from the money it makes at the box office)?
Whatever happens I hope it doesn’t effect the release of the film in the least, and that it comes out as and when planned.
So do you think it sounds like Borman has a legitimate case against these two producers? And if so do you think the sheer amount of money he’s asking for is warranted?
Terminator Salvation is scheduled to hit theaters on May 21st in the US and on June 5th in the UK.
Source: Yahoo
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16 Comments
If they owe him then they owe him, but it does seem excessive, to say the least.
Maybe he’s hoping no one will mess him about again if they see what he’ll try.
This seems to be coming common place lately..I really don’t give a rats @$$ as long as it comes to theaters..let the suits worry about this crap from now on..I couldn’t be bothered about a bunch of rich guys worrying about what is owed to them..
Reminds me of a quote from the Simpsons when Mr Smithers say to Mr. Burns
“Mr. Burns you have so much money”
Burns’ reply
“Ah Yes SMithers but I’d trade it all for a little more..”
Who cares?
Yah, everyone in this country is sue happy. True, they owe him the money of the amount promised, plus maybe lawyer fees, and maybe a little more for the trouble, but $160 million from $2.5 million? Come on…
It’s probably just to get them to settle out of court for a much lower amount… hopefully… Unless this guy has his head up in the clouds…
160 million? I think the asking price is too high. The prod. suing is obviously banking on the idea that the film is going to make hand over fist. But what will happen if the film makes, we’ll say, 200 million at the end of the North American run? Take out ad/marketing, distribution costs…T4 would barely break even.
Now, MY question isn’t really should it be 160 million or 60 cents. *MY* question is…well…
I’m not saying it won’t be a hit, but somehow I’m not that enthusiastic about the pic. I’m…just not feeling it. But, let’s say the film is a hit and makes profit down the road. Why do folks want a payday now? Do they want a HUGE cut now, because they fear after the film is out there it will be in the red for the next ten years?
@greenknight
I agree with you except that these things can get to the point where it can affect release dates and future films due to profit pitfalls.
Look at the whole Watchmen debacle – sure, it turned out fine, but it could have delayed the film or kept it from being shown at all. The 8% that Fox is taking from the GROSS box office could affect the bottom line of Warner Bros., which impacts future productions.
Vic
I can’t begin to say if he has a case because we really don’t know the truth for sure. However, I can say that what he is asking for is a joke. If he gets anywhere near that amount I will lose what little respect I have for our legal system. Just another person getting rich off of lawsuits.
Well Daniel, it’s not like it doesn’t happen every month. Our legal system is made so anyone can sue anyone over anything. And there are plenty of people who take advantage of that.
“but I’d trade it all for a little more..”
I always love that line.
Darren, I don’t really see why it matters how much money the movie itself makes. The issue is over the handing over of the rights, it’s not a royalty issue. The guy was owed a fixed amount, that’s how much he should get, not 30 times the amount. At most I think he should sue for $6-$10 million if he was conned out of $2.5. That should cover legal fees and a bit more for his troubles.
Of course his lawyers probably set the amount much higher hoping to get a good percentage of it…
It’s pretty easy to read between the lines, here. The producer obviously feels that the movie is unlikely to be released. If Halcyon, a company that has never produced anything that I can determine, by the way, owes creditors all over town, they will soon attach liens to the film. With those liens, the distributors will balk at paying anything, not wanting to see the film encumbered when it hits the screens. For Borman to take control of this film, he’s going to have to buy everyone out–the vendors first, and probably the distribution companies as well. So he needs that amount of money. Of course, these two people obviously don’t have that kind of money in the first place, not if they personally owe the production a million bucks. I just don’t understand why their haven’t been criminal charges filed. It is securities fraud if they took money from investors to make a movie but didn’t have sufficient financing to complete it.
They owe him $2.5 million and he’s asking for $160 million? That’s absolutely insane. Perhaps he saw the bad-ass Terminator Salvation trailer and figured “Ah-ha! Time to stop being Mr. Nice Guy and start milking them for money, ’cause this movie looks like it could be a hit!”
I bet it’s just another case of greed. Otherwise why sue now, when the movie is so near release, and not earlier, when the problem first cropped up?
Hey Vic, I’m going to have to sue you for $100 million dollars because you hurt 790’s feelings by posting that Speed Racer sucked.
:-)
Suing people has become like the national passtime of my country. Oh, I have to sue McDonald’s because this coffee that I spilled burned me. Never mind the fact that water has to be boiled to make coffee. Jeepers!!! Ok, the guy was promised $2.5 million; then sue, like Ken J. said, for $6-10 million. I guess Gordon Gekko was right: “Greed…is good”.
Damn Kahless, how much are you sueing me for then? 790 tried to insult me once and I made it completely backfire on him. He’s been on fire about it since, lol. I’m gonna get sued for like $200 million aren’t I? Dammit, where am I going to come up with that kind of money??
The reason for the higher amount is obvious. When Mr. Borman wins, Anderson/Kubicek/Halcyon will have to forfeit their rights in the Terminator franchise to cover the damages.
Yeesh… it’s too bad the film had a 200M budget and has only grossed less than 122M after six weeks.
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