Marc Cuban company sues Paramount for millions
EXCLUSIVE: Paramount has been sued for tens of millions of dollars by the Mark Cuban-backed entity that represents money behind 25 movies released in the 1990s.
Content Partners, the Cuban-affiliated company that manages Hollywood profit participation revenue streams, filed suit Monday in Los Angeles Superior Court claiming breach of contract, fraudulent concealment and constructive fraud based on Paramount's accounting for films such as "The Truman Show," "Face/Off" and "A Civil Action."
Content Partners claims in the suit that it is acting as the agent for various financiers that put money into five separate slates of Paramount films, beginning in 1996. In exchange for unspecified financial backing, the entities were granted as much as 40% of "Accountable Receipts" and "Picture Available Amounts," as defined in the deals. The contracts also allegedly had cross-collateralization language, a formula that the investors believed had reduced the risk that they would not be repaid on poorly performing films.
"Paramount wrongfully underreported revenues and improperly deducted alleged fees, costs and expenses from the revenues that should have been paid pursuant to its agreements," the complaint alleges.
A studio spokesperson says: "These claims, which concern an investment in films released over a decade ago, are an attempt to revise history and are without merit.”
Content Partners manages contingent compensation streams and, as part of its representation, will sue to collect unpaid revenue on behalf of clients. The financial entities represented in the current suit include Chase Manhattan, CineVision Insured Finance Inc. and four variations on an entity called ICE Insured Finance. It is not alleged from where the backing for CineVision or ICE comes.
An audit by the plaintiff allegedly showed that Paramount failed to substantiate $30 million in video costs and another $13 million in theatrical costs, plus an improper allocation of $12 million in indirect video costs, $8 million in production overhead, and under-reporting of $10 million in foreign TV money.
All told, the suit claims that more than $60 million is owed from the five slates combined.
Content Partners is represented by Marty Singer and Paul Sorrell at Lavely & Singer.
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