April 20, 2011 4:30pm PT by Matthew Belloni
Relativity Fires Back at Weinsteins Over 'The Crow' Lawsuit, Claims TWC Breached Duties on 'Nine'
This is yet another typical litigation stunt from the Weinsteins, who have a long history of threatening lawsuits with the sole purpose of intimidation. If served, Relativity will seek immediate dismissal. While we expect these types of antics from the Weinsteins, we are shocked that a lawyer of Mr. Fields' caliber would make such false, reckless and intentionally harmful statements to the press about Relativity and Mr. Kavanaugh. We intend to seek appropriate remedies for this misconduct. Clearly, this is a feeble attempt to create a press stir and a malicious effort to interfere with Relativity's development of the project.
As we reported earlier, the Weinsteins claim they have a signed deal granting TWC distribution rights to The Crow but that Kavanaugh has been shopping the rights without permission. The lawsuit (read it in full here) seeks an injunction to stop the sale of rights.
Looks like Relativity will fight this one. We hear the studio has hired Carol Genis of K&L Gates to represent it in the matter.
UPDATE: Relativity has provided us with a letter Genis sent TWC today. In it, Genis blames TWC for failing to meet obligations on the 2009 musical Nine, which was financed in part by Relativity but released by TWC. "It takes gall for your client to make demands upon Relativity about The Crow, which has not even been greenlit, when TWC's failure to properly distribute Nine demonstrated that it will disregard and breach any and all of its distribution, marketing and financial obligations." the letter states.
Ouch! Here's the full letter:
Dear Mr. Fields:
As we have informed you, the project for which you are demanding representations from Relativity is not even in production. Relativity has no obligation whatsoever to produce or distribute The Crow, and certainly has no obligation to assure TWC of anything. Relativity will waste no further time engaging in a hypothetical dialogue with you about a potential dispute that may or may not arise in the future.
In addition to being premature, your letter smacks of delusion as it ignores TWC's multiple breaches of the parties' March 25, 2009 agreement ("Termination Agreement").
TWC openly and undisputedly failed to meet its financial obligations relating to Nine and failed to meet the contractual minimum marketing spend and contractual minimum screens for that film. As TWC is well aware, its wrongful conduct led to serious financial and other damage to Relativity. On top of such breaches, your client has failed to make payments due to Relativity and to provide the required accounting statements. It takes gall for your client to make demands upon Relativity about The Crow, which has not even been greenlit, when TWC's failure to properly distribute Nine demonstrated that it will disregard and breach any and all of its distribution, marketing and financial obligations. If any party is entitled to seek legal remedies it is Relativity.
Further, your continued bluster about filing a lawsuit in an effort to force Relativity to distribute a nonexistent film through TWC is not only absurd, it is a blatant threat to breach the dispute resolution provision of the Termination Agreement. The Termination Agreement does not permit claims for injunctive relief to be brought in court. To the contrary, the Termination Agreement provides that "[a]ny and all controversies, claims or disputes arising out of or relating to this Agreement shall be resolved exclusively in one or more confidential arbitration proceedings in accordance with the procedures set forth in the NDA." (§ 15 (emphasis added).) The arbitration procedures in the NDA are found at Section 5.2, which sets forth the arbitration forum, rules, and appeal process. Your erroneous claim that TWC can bring a lawsuit arising out of the Termination Agreement is presumably based upon a misapplication of Section 5.1 of the NDA, which permits claims for injunctive relief "arising out of an alleged breach of [the NDA]" to be brought in court. As you know, the NDA has been terminated and TWC does not and cannot claim that Relativity is breaching or will breach the NDA. There is no good faith reading of these agreements which would permit TWC to file a lawsuit in court for a dispute arising under the Termination Agreement. As such, any claim brought by TWC in court will immediately be met with a motion for dismissal and sanctions.
Your client is forewarned and proceeds at its own peril.
Nothing in this letter is intended to waive any rights or claims Relativity may have against TWC, and Relativity expressly reserves all such rights and claims.