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A Los Angeles judge has awarded $12 million to Crash director Paul Haggis, co-star Brendan Fraser, writer Bobby Moresco and others as a result of the film’s producer Bob Yari employing “creative accounting” to divert money from the Oscar-winning best picture.
Since Crash was released in 2005, financier Yari has been involved in all sorts of litigation, from a lawsuit he pressed against the Producer’s Guild over credit on Crash to defending claims made by a variety of parties, including co-star Matt Dillon, over owed compensation.
One of the biggest lawsuits came from the film’s director, writer, and lead star over ways that Yari had used six different companies and made improper deductions to shrink the pool of profits that would be paid out to revenue participants. Among the various improper deductions cited was a $150,000 settlement to Sandra Bullock to settle a separate claim, $35,000 for legal expenses, $8,300 for a personal ad in Daily Variety, and $1,300 for Academy Award tickets.
In July, Judge Daniel J. Buckley agreed that Yari improperly deducted costs from the film’s gross receipts. In the ruling, the judge found that:
“Defendants breached the contracts with the plaintiffs by diverting funds to third parties; adopting bogus contractual interpretations; refusing to correct accounting errors in a timely manner; adopting inappropriate accounting procedures that were contrary to industry standards; and, ultimately, using all of these to avoid paying plaintiffs money due under contracts.”
At the time of the ruling last summer, Richard Charnley, the plaintiffs’ attorney, said he hoped the damage award would rise above $5 million in a later determination of the damages. Last Friday, a judge gave him more than twice that amount with a $12 million judgement.
Charnley was overjoyed at the outcome, saying, “The impact of the ruling goes beyond this specific case and sets new standards for the entertainment industry.”
Specifically, Charnely says the ruling signals that distributors can’t engage in self-serving interpretation of contract terms in order to deny profit participants their share and can’t create interlocking fictional business structures in order to divert cash from a production and thus reduce the profit participants’ share.
“We are pleased the court saw through the defendants’ manipulation and schemes, brought our clients a measure of justice and fired a shot across the bow of the those in the industry who may wish to engage in such sharp practices in the future,” he added.
Yari’s attorney, Behzad Nahai, could not be reached for comment.
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