February 05, 2013 3:54pm PT by Eriq Gardner
Weinstein Co. Financiers Get Out of 'Escape From Planet Earth' Lawsuit (Exclusive)
A financing entity that put up money for the animation film Escape From Planet Earth, from The Weinstein Co., has made its own escape from a nasty $50 million lawsuit.
Writer-director Tony Leech and film producer Brian Inerfeld filed the lawsuit against TWC on the eve of the 2011 Oscars, alleging that Harvey and Bob Weinstein were "two out-of-control movie executives ... who sabotaged what should have been a highly profitable movie through a potent combination of hubris, incompetence, profligate spending and contempt for contractual obligations."
The plaintiffs, who were subsequently labeled by TWC's attorneys as "vindictive Hollywood talent," went after not only TWC but also the financiers who, during the film's development, agreed to provide fresh funding. Leech and Inerfeld claimed that the funding agreement came at their own financial interest.
On Monday, New York Superior Court judge Barbara Jaffe handed co-defendant JTM Escape Co. an exit from the ongoing lawsuit in a summary ruling.
The lawsuit from Leech and Inerfield, the duo that created the 2005 Weinstein hit Hoodwinked, involved a computer animation film that proposed to tell the story of an alien prison break from Area 51.
Leech and Inerfeld said they signed a deal whereby they were to receive at least 20 percent of Escape's adjusted gross profit, which they estimated would be worth close to $50 million in back end participation alone.
But the film languished in development, and the plaintiffs claimed that the Weinsteins repeatedly unlocked the script, forcing rewrites at least 17 times, which they say "eviscerated" the movie's budget by keeping 200-plus animators on payroll.
With the film pushing its budget, the Weinsteins went outside for fresh capital.
TWC entered into a Funding and Security Agreement with JTM whereby the financiers agreed to provide new money and, in return, get 25 percent of the film's gross receipts and 100 percent of all foreign gross receipts.
Leech and Inerfeld were upset, alleging that the agreement had mortgaged their own financial upside and said the Weinsteins advised them that if they wanted their past due money, they would have to agree to this arrangement.
Instead, Leech and Inerfeld went on the legal attack against TWC -- even claiming that they were paid $500,000 in hush money to keep the dispute quiet on the verge of the Weinsteins' The King's Speech Oscar victory in 2011. As for JTM, the plaintiffs demanded a declaratory judgment that their contractual rights to share in the profits were superior to JTM's security interest in profits from the film.
But in reference to the financiers, Judge Jaffe says there's no controversy to adjudicate.
She writes: "The issue of who has superior rights to those profits depends on future events that may never occur, especially since plaintiffs and defendants have ceased working together on the film and plaintiffs' right to compensation is, in any event, contingent on various factors, such as the amount of profits earned, TWC's failure to pay them their alleged share of the profits, and TWC's payment of the profits to JTM."
Leech and Inerfeld also attempted to amend their complaint to add a claim of tortious interference against JTM. The proposed claim was premised on the allegation that JTM was aware that if Escape From Planet Earth was not greenlighted by the Weinsteins, the rights in the film would revert to the plaintiffs; that by deciding to finance TWC, it allegedly caused TWC to breach the plaintiffs' film agreement by entering into a funding agreement and rendering their reversionary rights secondary to JTM's secured interest.
In response, the defendants argued that there was nothing in the creatives' agreement that prohibited TWC from borrowing money to fund the film, and its obligation to "unconditionally finance" didn't limit how the film would be financed.
Judge Jaffe won't reject that logic.
"The term 'unconditionally finance' is not defined in the film agreement, and the parties offer competing plausible interpretations of its meaning," she writes. "Consequently, the term is ambiguous."
She goes onto say that because the term is ambiguous, "it may not be resolved here whether TWC breached the film agreement by obtaining financing from JTM" but no matter because there's no showing that "JTM acted improperly or intentionally to procure TWC's breach of the Agreement."
Leech and Inerfeld continue to pursue TWC directly. But at least one aspect of the case is finished. There won't be any more discussion of the alleged hush money that was paid to Leech and Inerfeld on the verge of the 2011 Oscars.
In their original complaint, Leech and Inerfeld said that TWC was claiming that the $500,000 payment was extorted and they sought a declaration that it was not. In her latest ruling on Monday, the judge notes that the plaintiffs have withdrawn their prayer for a declaratory judgment "in light of TWC's apparent decision not to seek to recoup that payment in this action."
After the lawsuit was filed, the Weinsteins then announced that the film would come out in 2013 and would be directed by Cal Brunker from a story written by "Brunker and Bob Barlen based on an original screenplay by Tony Leech and Cory Edwards."
Last year, Leech, Inerfeld and their lawyers got a chance to see a draft version of the forthcoming film.
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