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:
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.
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.
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