Miramax Argues Saul Zaentz Took Too Long to File 'The English Patient' Lawsuit

A profit-sharing dispute nearly two decades in the making is on the verge of a trial next April.

At 162 minutes, The English Patient was too long for some moviegoers. But that's nothing compared to the amount of time that Saul Zaentz has been wondering whether he's gotten everything due to him for the 1996 Oscar-winning film.

For example, in 1997, Zaentz noted that distributor Miramax had spent $30 million to advertise the film and told The Hollywood Reporter, "Have I been paid all the money Miramax owes me? No, but these things take time. Am I nervous about being paid? Talk to me in January after I've seen the fourth-quarter statement."

Flash forward 16 years.

In September 2011, Zaentz sued Miramax and its former owner, the Walt Disney Co., for $20 million in profits from the hit drama.

Now, Miramax has filed a motion for summary adjudication over Zaentz's claims relating to theatrical advertising expenses. In court papers filed last week, Miramax nods toward that old THR quote and is contending that the producer simply waited too long to bring allegations that it improperly deducted expenses.

The dispute has been going on for seemingly forever.

Miramax, then run by the Weinstein brothers, purchased the film in 1995 from Zaentz for $27.5 million. The agreement provided for contingent compensation depending on its performance.

In the lawsuit, Zaentz alleges he has been shortchanged on a film that grossed more than $300 million when it came out. "To this day, despite the great success of the film, [Zaentz] has not even received from Miramax payment sufficient to recoup [Zaentz's] costs of producing The English Patient," the suit said.

Part of the controversy is over issues of expense allocation. Zaentz claims that Miramax shouldn't have deducted $17.5 million of theatrical advertising expenses because the money also benefited the home entertainment release of the film. There's also the issue of $2 million deducted for money related to the promotion of talent for Academy Awards, Golden Globes and other award ceremonies. The suit alleges a conspiracy "to keep the picture in a paper loss position so that no matter how much money The English Patient earned, Miramax and Disney would reap all of the profits" while Zaentz would never share in the success.

But a side issue has arisen over Zaentz's duties to file objections in a timely manner.

According to Miramax, the acquisition agreement for The English Patient came with an incontestability clause that specified that Zaentz had 36 months to challenge a participation statement.

The parties entered into a tolling agreement effective November 20, 2000, that allowed Zaentz some grace period in which to file an objection, but Miramax says that by that date, Zaentz's clock had already run out. The producer allegedly got participation statements in 1997, which Miramax argues made them incontestable three years later.

"Because Zaentz did not comply with the Incontestability Clause insofar as its Theatrical Advertising Claims are concerned, those claims are barred," says the summary adjudication motion.

Miramax is being represented by star litigator Martin Katz.

Zaentz is bringing Marty Singer to the legal battle. The plaintiff's response to the argument that the claim is time-barred is that the incontestability clause comes from an inoperable short-form agreement. Zaentz' attorneys also say that the expense allocations represent just one of their claims. The lawsuit also contends that Miramax has cheated on profits in other ways, including unfavorably packaging the film with others in its licensing deals.

Assuming the judge allows the claims to go forward, it would set up a high-powered legal showdown at a trial next April. That's not too long to wait, right?

E-mail: Eriq.Gardner@THR.com

Twitter: @eriqgardner