'Birdman' Exec Producer Sues Embattled Worldview for $70 Million

Birdman Still 3 - H 2014
Courtesy of Fox Searchlight

Birdman Still 3 - H 2014

Worldview Entertainment, one of the companies behind best picture Oscar winner Birdman, is under fire from its former CEO Christopher Woodrow and former CFO Hoyt David Morgan in an ongoing legal war. Now it’s fighting on a third front.

The company was hit with a new lawsuit from film financier and Birdman executive producer Sarah Johnson on March 12. The heiress to the multibillion-dollar Franklin Templeton fortune claims the company misused her investments and lied to her about its financial state over several years, causing her to lose $20 million or more.

Her complaint in New York state court addresses the company’s conflict with Morgan, which began when the former CFO sued over $2.7 million and a credit on Birdman he claims he’s owed from a termination agreement. Worldview responded with a suit against Woodrow, claiming he illicitly made the agreement with Morgan and embezzled nearly $1 million from the company.

The dispute exploded with a $55 million lawsuit Woodrow filed days later, claiming his former colleagues pushed him out of the company’s affairs and hacked into his personal email, among other accusations. Meanwhile, in Worldview’s conflict with Morgan, the former CFO won an unusual victory in the form of a temporary restraining order prohibiting the payment of Birdman investors from the investment fund, Worldview Entertainment Partners VII, set up to finance the film.

Johnson is one such investor who won’t see the $2.6 million she claims to have invested in Birdman back until the temporary restraining order lifts — if at all. She’s claiming the “unauthorized and negligent actions” of the company’s former and current employees led to the legal struggle that’s imperiled her investment.

But Morgan's litigation is only part of the case Johnson brings against the company. She’s seeking $70 million in damages for 28 counts of alleged mismanagement.

She claims she first invested in Worldview in 2011 for Welcome to the Punch, a crime thriller with James McAvoy and Mark Strong. In the years through 2014 she claims she invested tens of millions more in the the company co-founded by Woodrow and Maria Cestone, both defendants in the suit, to finance films including The Immigrant with Marion Cotillard, Devil's Knot with Reese Witherspoon and the untitled Howard Hughes film from Warren Beatty.

The company "made repeated representations to Plaintiff regarding the status of her investments in order to induce her to make continued financial contributions to the Worldview Film Funds," states the complaint. She claims Woodrow and Cestone repeatedly told her she’d receive a 20 percent return on her investments but refused her requests to check the company's financial documents.

In May 2014 "a Worldview Inc. employee alerted Plaintiff that Woodrow had been improperly utilizing corporate funds for personal use, as well as engaging in a pattern and practice of harassing Worldview Inc.'s employees," reads the complaint. Woodrow exited the company under unusual circumstances the next month.

Johnson claims she learned in the following months that the company's officers "had not only made false representations regarding her investments, they had also breached the agreements relating to these investments and had engaged in complete dereliction of duty."

Her complaint lists numerous alleged breaches of contract, including taking over $2 million in film profits before recouping investors and using a $9.1 million loan from Johnson before reaching the $30 million funding target. (Worldview allegedly paid $6 million to The Weinstein Company in connection with the drama Tulip Fever.)

But she goes beyond alleging breaches of contract. “Upon information and belief, Cestone, Woodrow, Conners and Morgan caused Worldview Inc. and the Worldview Film Funds to enter into financing, production and distribution agreements that were lopsided and inconsistent with industry standards,” reads the complaint. Johnson includes in this category defaulting on a loan for Devil’s Knot and failing to pay for the foreign rights to the Anne Hathaway romantic drama Song One, which she claims will prevent her from recouping her investments in the films.

Worldview has dealt with several key executive departures in the past year, and it recently shuttered its New York office and now operates from New Jersey.

In a statement to The Hollywood Reporter, Morgan's attorney, Joshua Graubart of Winslett Studnicky McCormick & Bomser, says, "Mr. Morgan was shocked to learn that Ms. Johnson had named him as a defendant in her lawsuit against Worldview and its principals. Ms. Johnson and Mr. Morgan were co-investors in multiple Worldview projects; if she was defrauded — as she claims — so was Mr. Morgan. In fact, Mr. Morgan is pursuing his own legal action against Worldview and its principals. There is no basis whatsoever for any of Ms. Johnson’s claims against Mr. Morgan. We hope she will soon realize that and withdraw her claims. If not, we stand ready defend Mr. Morgan through the final adjudication of this matter, and we are confident he will be fully vindicated by the court."

THR has reached out to attorneys for Worldview. Woodrow's representative didn't immediately comment.

Mar. 24, 3:39 p.m. Updated with comment from Morgan's attorney.

Email: Austin.Siegemund-Broka@THR.com
Twitter: @Asiegemundbroka