4:31pm PT by Eriq Gardner
'Birdman' Credit Snub Explored in Financier's Lawsuit
After a court hearing last week, former Worldview Entertainment CFO Hoyt David Morgan continues to keep the heat on his former company for allegedly reneging on a deal to give him an executive producer credit on Birdman as well as pay him back $2.7 million.
On Tuesday, New York Supreme Court Judge Eileen Rakower nixed arbitration in the case, refused to dismiss Worldview co-founder Maria Cestone from the lawsuit, and, while making Morgan put up a $1 million bond, kept a restraining order in place that freezes payouts to some of the Birdman's producers.
The rulings come after Worldview lashed out at Morgan's attempt to handcuff the money being collected from Birdman distributor Fox Searchlight, alleging he was terminated with cause for misconduct and had extorted the separation agreement and Birdman credit by leveraging his knowledge about what former Worldview CEO Christopher Woodrow was up to.
But in an affidavit (see here) submitted on Jan. 27, Morgan attempts to set the record straight, portraying his former company's story of how he had come to a secret, under-the-table deal with Woodrow as a total fabrication.
According to Morgan, his relationship with Worldview began at the end of 2011 with a $50,000 investment in a film called Welcome to the Punch, and after having invested in seven of the company's films, he was nearly equal to two of the company's largest investors — Cestone and Sarah Johnson, whose father built Franklin Templeton Investments and is the wealthy owner of the San Francisco Giants. (See her profile here.)
Morgan, an investor in technology and media businesses, first became a consultant at Worldview and later its chief financial officer. In his legal filing, he said he wanted to ensure his investments were as protected as possible.
In May 2013, though, Morgan says the relationship with Worldview was "deteriorating." He didn't like the terms of Worldview's sale of the film Blood Ties, a film starring Clive Owen and Marion Cotillard that reportedly had a $25 million budget and has only had a limited release. Morgan says he was the largest single investor on that film and began voicing his disapproval of "questionable business practices of Woodrow and Connors."
"In short, it was a dysfunctional relationship," he adds, "and things came to a head at the 2013 Cannes Film Festival, with things like Woodrow and Conners excluding me from the red-carpet walk with the Blood Ties cast — including Cestone and Johnson instead — and all parties exchanging accusations of misconduct."
Morgan says he left the film festival early only to learn his colleagues were going to try to force him out, and rather than put up much of a fight, he decided to take a "clean break" by negotiating his exit. He adds, with old emails to support, his primary contact on the separation wasn't Woodrow, but rather Cestone, and throughout the negotiations, others at Worldview were brought into the loop — potentially undercutting the defendant's position that Woodrow couldn't bind Worldview into a secret and extraordinary deal.
Various exit plan options were presented, and ultimately, the sides came up with a compromise where Worldview would eventually buy back Morgan's equity. It's also here were Morgan was promised an executive producer credit on Birdman.
By early 2014, Morgan wanted to exercise a buyout right under the agreement, and Worldview vp business development Blaine Johnston was proposing in email that the company would speed things along if he gave up credit on Birdman and Child 44, a film set to be released in April starring Tom Hardy.
The Johnston email, says Morgan, proves two things: his separation agreement wasn't secret and "Worldview assigns considerable value to executive producer credits."
Morgan says he definitely wanted a quicker buyout of his equity because he had lost faith in the company. For whatever reason, though, the parties weren't able to find peace and ended up in court with Morgan in heated pursuit of what he says he was promised.
In Worldview's attempt to deny him any compensation from the Birdman credit snub, the company told the judge he "did not meet the Producers Guild of America’s requirements for an executive producer credit on Birdman" and that his "requested executive producer credit on Birdman has no monetary value."
Morgan says he definitely earned the credit.
"Birdman was purely a financing deal for Worldview, and I was heavily involved in analyzing that financing opportunity," he states. "I evaluated the financial models for the film with our agents (CAA) on behalf of Worldview, and I prepared notes on the contract for internal and investor use. This was more than Conners did for her executive producer credit on the same film."
Interestingly, Morgan says he was originally given a Birdman credit, and that it was documented by Fox Searchlight and IMDB. In his parting shot, he adds, "But later, after the film had developed a significant pre-release buzz, Worldview took away the credit and essentially sold it to defendant Sarah Johnson for millions of dollars."