September 29, 2011 5:27pm PT by Matthew Belloni
'The English Patient' Producer Saul Zaentz Sues Disney, Miramax for $20 Million (Exclusive)
The Saul Zaentz Co., producer of the 1996 best picture winner The English Patient, has sued distributor Miramax and its former owner the Walt Disney Co. for $20 million in profits from the hit drama.
The suit, filed Thursday in Los Angeles Superior Court, alleges a years-long scheme among Miramax, then run by Harvey Weinstein, and its former owner Disney to hide revenue, improperly allocate and deduct expenses and fees and engage in self-dealing with respect to the film.
English Patient grossed more than $300 million worldwide, in addition to sweeping the Academy Awards in 1996.
"To this day, despite the great success of the film, [Zaentz] has not even received from Miramax payment sufficient to recoup [Zaentz's] costs of producing The English Patient," the suit alleges. It says Miramax has kept tens of millions of dollars that was supposed to go to Zaentz.
This isn't the first time Zaentz has sued over the film. The dispute has been going on for a decade, and Zaentz sued in 2006, making similar arguments based on an audit of the film's books and records. But that case was dismissed in 2008 and the new lawsuit says the parties have had a tolling agreement (to prevent statute of limitations issues) in place.
The suit alleges a conspiracy "to keep the picture in a paper loss position so that no matter how much money The Engligh Patient earned, Miramax and Disney would reap all of the profits while" Zaentz would never share in the success. Zaentz says his company ponied up $15.75 million in its own money and deferred compensation to get the film made and got assurances from Miramax that it would get a better profits definition than a standard deal. The deal allegedly gave Zaentz 10% of adjusted gross receipts, which rose to 15% after break-even, plus 60% of net profits. However, Zaentz says Miramax later tried to hold his company to a much less favorable profits definition and has been unwilling to make concessions.
Disney sold Miramax in 2010 to a group of investors that include businessman Ron Tutor and Colony Capital. Weinstein had left the company years before to start the Weinstein Co.
The suit, filed by Marty Singer at Lavely & Singer, alleges causes of action including breach of contract, breach of fiduciary duty and seeks an accounting and declaratory relief.
We've reached out to Disney for comment.