July 13, 2011 3:16pm PT by Eriq Gardner
Film Financier Sues 20th Century Fox Over Mysterious Investment (Exclusive)
Is it possible to make an $8.6 million investment with a Hollywood studio and have absolutely no idea what the money has bought?
Yes, according to Smashing Pictures, which details in a lawsuit filed Tuesday how a boatload of its money ended up at Twentieth Century Fox to purchase...well, it's seeking answers.
In 2005, Smashing Pictures made a co-financing/co-production agreement with Fox for a slate of up to 20 teen comedies. Smashing was supposed to make a $15 million buy-in.
Smashing could only make $8.6 million of that amount.
Unable to meet its full financial burden, Smashing requested its money back under the terms of the agreement. Fox refused, citing a forfeiture, which led Smashing to file a lawsuit for breach of contract.
According to the complaint, Fox then changed its tune in court, deeming the $8.6 million as not a payment for forfeiture, but rather as money "credited" toward an interest in three of the films. Fox made the move under an interpretation of the contract that was then accepted by a judicial referee.
OK, says Smashing in its lawsuit against Fox on Tuesday. Just tell us what we bought.
"Fox has never provided Smashing with a single piece of paper evidencing that Smashing had an interest in a single motion picture," says the complaint. "Fox has never told Smashing the name(s) of the film(s) in which Smashing has an interest, how much interest Smashing has in the film(s), the revenue associated with the film(s), and the expenses associated with the film(s), among other things."
Smashing is again suing for breach of contract, this time for rejecting a request for an audit.
Fox hasn't responded to requests for comment.