'Beverly Hills Ninja 2' Director Scores Win in Arbitration Against Korean Investors (Exclusive)

Mitchell Klebanoff, who co-wrote the 1997 Chris Farley comedy Beverly Hills Ninja, has prevailed in his dispute with a group of Korean investors that karate-chopped him away from directing a sequel.

Nevermind that the original movie wasn't Farley's best. It was a cult hit, and the follow-up was set to star none other than David Hasselhoff. Klebanoff got permission from Sony's Screen Gems division to seek outside financing for his stalled sequel -- and found success in the guise of funding commitments from some Korean producers. 

After getting the backers on board, Klebanoff shot about 30 percent of Beverly Hills Ninja 2 in South Korea and Los Angeles before being forced to stop because nobody paid the bills. Production started up again in Vancouver, and then stopped again, thanks to disagreements between Klebanoff and the Korean producers over things like whether the film's lead actress should appear nude in the film.

Klebanoff was terminated.

The two sides then filed lawsuits against each other.

Klebanoff claimed he was owed money and never properly terminated. He also alleged that the Korean producers had defamed him by bad-mouthing his work to Sony.

Meanwhile, the other side, including financing entities Beverly Hills Ninja 2, LLC and Dancing Ninja Pros and principals Jungho Han and Danielle Na claimed that Klebanoff had misrepresented his experience in the film business in order to get them to invest. They further alleged that he had negligently performed his duties as director in violation of the contract.

The dispute ended up before IFTA arbitrator Michael Diliberto, who determined that Klebanoff had thin directing experience but that the Koreans knew that at the time of the funding commitment. The quality of the sequel was therefore impacted by financial issues beyond Klebanoff's control and producers didn't give sufficient "notice" to Klebanoff that he was in default of the Directing Services agreement. 

Klebanoff didn't get everything he wanted: The arbitrator didn't find enough evidence to support defamation claims in his June 24 decision. But overall, Klebanoff, repped by Jeremiah Reynolds at Santa Monica's Kinsella Weitzman firm, prevailed on his main claims, winning nearly $262,000, which included principal money due, legal costs, and interest. Klebanoff filed a petition on Monday in state court to confirm the final award, and a hearing is set for Sept. 21.

E-mail: eriqgardner@yahoo.com

Twitter: @eriqgardner