Paramount Wins 'No Country' Trial Over Payout to Tommy Lee Jones

A judge has issued a tentative ruling against Morgan Stanley-backed Marathon Funding, which claimed that Paramount improperly deducted a $17.5 million box office bonus to Jones from its profit participation.

9:46 AM PST 12/30/2011 by Matthew Belloni

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Paramount Pictures

"No Country for Old Men's" Tommy Lee Jones

Paramount has tentatively prevailed in a legal dispute with a Morgan Stanley-backed film finance entity that claims it was cheated out of profts from No Country for Old Men due to a hefty payment to actor Tommy Lee Jones.

Paramount Acknowledges Screwing Up Tommy Lee Jones' Pay on 'No Country for Old Men'

'No Country for Old Men' Lawsuit Heads to Trial Over Payment to Tommy Lee Jones

As we've reported, Paramount, which distributed the 2007 best picture Oscar winner via its Paramount Vantage label, was forced to pay Jones a $17.5 million box office bonus when an arbitrator found the studio's lawyers had made an error in drafting Jones' deal to star in the movie (the lawyers ultimately paid a $2.6 million settlement to the studio for the error).

Morgan Stanley's Marathon Funding, which had a multipicture financing deal with Paramount that included No Country, later cried foul, claiming its arrangement with the now-shuttered Paramount Vantage entitled it to 25 percent of "net distribution revenue" from the movie. Marathon in April 2010 filed a breach of fiduciary duty lawsuit claiming the studio shouldn't be able to deduct a $2.45 million charge from the pool of money it must pay to Marathon for backing the movie.

The case went to trial in front of L.A. Superior Court Judge Mark Mooney, who on Dec. 22 issued a tentative ruling siding with the studio. Mooney has found that because Paramount's relationship with Marathon was not a joint venture, the studio did not owe Marathon a fiduciary duty and thus the charge was not inappropriate.

Marathon "has not met its burden of establishing by a preponderance of evidence that Paramount owed a fiduciary duty to Marathon," the tentative ruling states. The ruling must still be confirmed, but judges rarely alter their tentative decisions significantly.

Paramount is repped by Richard Kendall. Marathon is repped by Hillel Chodos.

Email: Matthew.Belloni@thr.com

Twitter: @THRMattBelloni