December 18, 2012 6:46pm PT by Alex Ben Block
Lawsuit Claims Starz-Owned Movie Company Hid Profits
Nu Image filed a lawsuit Tuesday against the defunct movie distributor Overture Films charging that its parent company, Starz Media, has failed to properly account for three of its movies that were distributed and won’t provide financial data to auditors.
The suit, filed in L.A. Superior Court, says that the movies licensed to Overture were Righteous Kill, starring Robert De Niro and Al Pacino; Mad Money, starring Diane Keaton and Queen Latifah; and Brooklyn’s Finest, starring Richard Gere, Don Cheadle and Ethan Hawke.
Nu Image made deals with Overture for exclusive distribution rights in the U.S. and certain other territories for 20 years, the suit says. Overture promised to pay a minimum guarantee, according to the suit, as well as 10 percent of the adjusted gross proceeds and 50 percent of the net proceeds.
Nu Image says Overture also promised in the contracts for each movie to allow audits of books and records concerning these movies, but that the company has refused to do so.
Starz did provide Nu Image with participation statements, but the suit charges that these were “extremely sparse and oblique.” The suit says Nu Image also challenges the accuracy of the statements.
All three movies were distributed and, according to the suit, made at least their cost back and in some cases profits.
The suit says that Starz has failed to pay Nu Image money that was due under the contracts. The suit asks for that money to be paid, as well as damages, legal costs and interest.
Overture was founded in 2006 as an indie movie distributor, originally co-owned by Liberty Media (which owns Starz) and The Weinstein Company. It had some success but was shut down in 2010.