Michael Moore Sues Weinsteins Over 'Fahrenheit 9/11' (Updated)
11:12 AM PST 2/7/2011 by Matthew Belloni
He claims he was cheated out of at least $2.7 million in profits from his hit documentary.
Filmmaker Michael Moore has sued Harvey and Bob Weinstein, accusing the brothers of “Hollywood accounting tricks” and “financial deception” that cheated him out of at least $2.7 million in profits from the hit documentary Fahrenheit 9/11.In a lawsuit filed today in Los Angeles Superior Court, Moore says the Weinsteins and an affiliated entity called the Fellowship Adventure Group agreed to split profits from the film 50-50 but then diverted monies to hide them from Moore. The suit for breach of contract, breach of fiduciary duty and constructive fraud claims that in 2008 Moore conducted an audit of the 2004 film, which grossed $222 million worldwide, and “discovered substantial irregularities in the accounting” that resulted in a “gross underpayment to [Moore],” the lawsuit says. Those irregularities include an alleged secret deduction of $2.5 million in revenue that the Weinstiens claimed was paid to acquire an interest owned in the film by a predecessor company called Icon Entertainment International; a 7.5% “override” fee on advertising costs in the amount of $1.2 million, “despite the fact that [the Weinsteins] did not incur the advertising costs and the [deal] did not permit [them] to deduct these costs”; as well as additional improper deductions of fees paid to distribution consultants, accountants, residuals, foreign taxes and travel expenses, including what Moore says are the “grossly excessive and unreasonable” costs of hiring a private jet to carry a single passenger to Europe. Weinstein lawyer Bert Fields dismissed the claims in an interview. “The Weinsteins have paid everything they should have paid,” Fields tells THR. “Mr. Moore has received a huge amount of money from this film and we believe he is overreaching. He should be ashamed of himself” Fields says the Weinsteins have been discussing the claims with Moore, his lawyer Larry Stein and his agent Ari Emanuel for about about six months. “We’ve had a number of meetings and have kicked around their arguments and ours, and they have a lot of problems with their claims.” Stein responds that it's Fields and the Weinsteins who should be ashamed of themselves. "Independent auditors determined that Michael was owed these monies," Stein tells THR. "Apparently it's the Weinsteins who were unhappy with the millions of dollars they have already received." The lawsuit is an odd turn in the relationship between Moore and the Weinsteins, who have been champions and financial backers of some of his most acclaimed films. Moore has already made between $19 million and $20 million on Fahrenheit, according to sources. But the suit claims that the Weinsteins have not produced all the information required to conduct a complete audit, suggesting that alleged damages could be even higher. UPDATE: Stein has issued the following statement:
"An independent auditor came in and discovered that the Weinsteins had re-routed at least $2.7 million dollars that belonged to Michael Moore from "Fahrenheit 9/11." This is the first time Michael Moore has ever sued anyone in his 20-yr career as a filmmaker. That should be some indication about how serious this is. It's very sad it had to come to this. Michael believes the Weinsteins have been a force for good when it comes to championing independent film -- but that does not give them the right to violate a contract and take money that isn't theirs. The $2.7 million is just the floor of what we believe is owed. When this goes to discovery I wouldn't be surprised if the amount of what was taken goes much, much higher."
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