10:17am PT by Eriq Gardner
Investors in Nicolas Cage Film 'Bad Lieutenant' Sue Claiming Bad Accounting
Investors in the 2009 Nicolas Cage film Bad Lieutenant: Port of Call—New Orleans have filed a lawsuit against Nu Image and First Look Studios, claiming that proceeds from the motion picture have not been shared and that top executives have siphoned off revenue.
Polsky Films, a film production outfit founded by brothers Alan and Gabe Polsky, filed the lawsuit in Los Angeles Superior Court. According to the complaint, Polsky put up $1.3 million to finance the print and advertising budget for the U.S. distribution of the film. The financing agreement allegedly stipulated that Nu Image and First Look had to establish a collection account at Comerica bank and was obligated to pay all U.S. proceeds from the film into this account. The agreement limited deductions to home video packaging, freight and delivery expenses.
Once the money was placed into the collection account, the complaint says, the proceeds had to be distributed according to a specific plan. Besides reimbursement for its own P&A contributions, Nu Image wasn't supposed to collect money until residuals, bank financing and Polsky's P&A contributions were recouped.
In its lawsuit, Polsky says that the defendants failed to properly set up the collection account and have exhibitors and licensees pay proceeds there. Instead, the defendants are accused of improperly deducting expenses, failing to disburse proceeds, and not accurately and truthfully accounting for all of the money.
Co-defendants Avi Lerner, head of Nu Image, and Trevor Short, former CEO of First Look Studios, also are targeted in the complaint. The lawsuit includes allegations that the defendants fabricated "P&A Expenses" in order to profit themselves at the expense of the plaintiffs.
Polsky, represented by Miles Feldman, is demanding compensatory damages and as a result of the breach, wants a declaration that it now owns distribution rights on the film.
Nu Image hasn't responded yet to request for comment.
Bad Lieutenant was directed by Werner Herzog and was nominated for several awards at the Venice International Film Festival and the 2010 Independent Spirit Awards.
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