June 28, 2012 8:49am PT by Daniel Miller
Producer Joel Silver and Goldman Sachs Settle $30 Million Legal Dispute (Exclusive)
Joel Silver and Goldman Sachs have reached a settlement in their legal dispute that originated from a multimillion-dollar breach of contract and fraud lawsuit brought by the producer against the investment bank in 2010, according to Bert Fields, Silver's attorney.
Terms of the settlement are not known. Silver's suit alleged that New York-based Goldman Sachs did not pay him more than $30 million due from a series of financial arrangements made in 2007 related to films produced by his Dark Castle Entertainment production company.
“I felt very strongly he had a good case; I am delighted we have settled,” Fields told THR, adding that the settlement had been reached in principle and was "being documented as we speak."
Silver's suit, which was filed in Los Angeles, claimed Goldman Sachs agreed orally and then in written deals to pay Silver $30 million in exchange for a share of revenue from films made by Dark Castle, the Warner Bros.-based division of his Silver Pictures. (THR reported in April that Warner Bros. is ending its decades-long relationship with Silver, opting not to renew its deal with the producer; the pact expires at the end of 2012.)
Silver, the producer of the Lethal Weapon and Matrix movies as well as the two recent Sherlock Holmes films, alleged that in 2007, he introduced Goldman to his financing connections to help the bank buy up parts of Alliance Films, the Toronto-based television and film producer and distributor.
During the Alliance acquisition, Goldman allegedly promised Silver would be paid $35 million (later reduced to $30 million) in exchange for a share of revenue from Dark Castle's slate of movies. However, Silver said he had to wait on payment until the Alliance deal was fully financed, and after financial troubles hit the market, Goldman allegedly repudiated its contractual obligations and never paid him what he says was owed.
After the lawsuit was filed, Goldman Sachs fired back at Silver, calling it "implausible" and "absurd." The investment bank filed a motion to dismiss the complaint, arguing, among other things, that any agreement with Goldman Sachs would have been extensively documented in writing. A judge later ruled against the investment bank's motion to dismiss.
In 2011, Goldman Sachs hit Silver with counterclaims based on alleged representations by Silver's companies to make the deal happen. The producer was claimed to have "deliberately and fraudulently" overstated the anticipated performance of the 15 films in the Dark Castle slate.
The dispute was headed to a trial in January, but the two sides are finalizing the agreement reached in principle.
“It is always a bold move when you sue somebody as powerful as Goldman Sachs," said Fields, a partner at Greenberg Glusker Fields Claman & Machtinger LLP. "It took a lot of courage on Joel's part."
Goldman Sachs declined comment. The investment bank was represented by Fred Norton and Jonathan Schiller at Boies Schiller & Flexner LLP.