AMC's Bid to Avoid 'Walking Dead' Accounting Trial Denied by N.Y. Judge

The Walking Dead Season 2 Finale Andrew Lincoln - H 2012
Gene Page/AMC

The Walking Dead Season 2 Finale Andrew Lincoln - H 2012

The Walking Dead profits fight between AMC on one side and Frank Darabont and CAA on the other is one step closer to trial as a New York judge on Monday denied the network's motion for summary judgment. 

Darabont in 2013 sued, claiming he's owed hundreds of millions in profits because of AMC's allegedly shady accounting practices, while the network claims everything is above board and the producer is trying to renegotiate his contract through litigation.

In 2018, Darabont filed a separate suit alleging that AMC miscalculated MAGR (modified adjusted gross receipts) and breached its most favored nations obligations to Darabont by giving another profit participant a more favorable distribution fee. AMC moved for summary judgment.

Judge Joel M. Cohen on Monday found there are factual disputes that warrant a trial and denied AMC's bid to end the fight before it's put before a jury.

"The Court finds that the parties' agreements, taken as a whole, are 'susceptible of more than one commercially reasonable interpretation' with respect to MAGR and thus are ambiguous," writes Cohen in the decision.

The parties dispute whether a season two amendment to the deal was triggered because they disagree on whether Darabont's termination meant he rendered "executive producer/showrunner services for all episodes in Season 2." The now-retired judge who issued rulings on motions for summary judgment in the 2013 complaint found issues of fact that preclude granting judgment on the matter. Cohen not only holds that Eileen Bransten's decision is controlling but, even if it weren't, he agrees that it was correct.

Further, Cohen found "the determination of whether AMC acted arbitrarily, irrationally, or in bad faith in defining and applying MAGR so as to breach the implied covenant of good faith and fair dealing presents disputed questions of fact for trial."

Dale Kinsella, attorney for Darabont and CAA, on Monday sent The Hollywood Reporter a statement in response to the decision. "Plaintiffs are pleased that the court has soundly rejected AMC's final effort to keep plaintiffs' case from being heard by a jury," he said. "We look forward to the trial in November and the vindication of Mr. Darabont and CAA's claims.”

AMC's attorney Orin Snyder also sent THR a statement. "Today's ruling on the accounting portion of the CAA litigation confirms what all parties have been expecting for many months — this case will be tried in front of a jury and we look forward to that happening later this year," he said. "We believe the facts are clearly on our side and that a jury will agree that the most sophisticated and experienced dealmakers in the entertainment business should not be able to turn to the courts to renegotiate valid agreements they entered into years ago just because The Walking Dead became a bigger hit than anyone anticipated.”