Producer Hits Back At 'Arbitrage' Director With Injunction Request (Exclusive)

The forthcoming film, Arbitrage, set to star Richard Gere and Susan Sarandon, has erupted into an all-out legal war between director/writer Nicholas Jarecki and Michael Ohoven's Infinity Media.

Last week, Jarecki filed a lawsuit in New York that claimed Ohoven was asserting dominion over his film about a troubled hedge fund magnate who seeks help to get himself out of a tricky financial situation. Jarecki sought a judicial declaration that Ohoven couldn't claim co-authorship on his picture just because Infinity had provided some assistance in getting it off the ground. Not without a written agreement between the parties.

On Tuesday, Infinity filed its own lawsuit against Jarecki in LA Superior Court, presenting the back story of the relationship between Jarecki and Ohoven (CapoteSaved! and The Devil's Rejects) and how the director allegedly breached an oral contract, didn't honor a covenant of good faith and fair dealing, and tortiously misrepresented himself in dealings over Arbitrage.

Both parties agree that no written contract was executed.

However, Infinity says that Jarecki and Ohoven reached an oral agreement over the film, and that on June 22, 2010, it presented Jarecki's lawyers with a standard Option Agreement to acquire rights in the film under those orally agreed-upon terms.

Infinity's complaint then goes on to give an exhaustively detailed timeline of the myriad ways in which Jerecki supposedly communicated his understanding about the terms of the agreement, the acceptance of these terms, and ways in which the acceptance led to activities by each of the parties to bring the film to financial reality.

For example, Jarecki is said to have written a June 23 e-mail -- the day after his reps got the Option Agreement -- that said, "I just received the draft option agreements from [Infinity's lawyer] and I was enormously pleased that upon first glance they looked to fully represent our conversation in your office, and be agreeable in areas we did not even have time to fully cover! You are direct, precise, and straightforward -- and you impress me at each turn."

Several months later, in October, Jarecki wrote a letter, stating "[H]i Guys -- This [referring to the Option Agreement] looks fine in principal. I see a few notes...but mostly minor stuff."

Infinity's complaint (below) offers more correspondence during these developmental months whereby Jarecki allegedly represents his knowledge of a standing option agreement and his commitment to work together.

During those months, the plaintiffs are said to have engaged other parties to work on the film, including sales agents and a casting director, and at various times, reached out for assurance it had authority to make the moves. In some instances, it seemed to get confirmation from Jarecki's reps; In other instances, there was no objection noted.

The film also needed stars, and so, Jarecki reached out to Al Pacino and Rachel Weisz, using Ohoven's participation as a "producing partner" as a sales point, since he worked on the films, Capote and Confidence.

In sum, Infinity can't produce a fully executed agreement where it officially acquired the rights, but it provides a laundry list of circumstantial evidence to show that an agreement was in force anyway and that Jarecki understood that. Arbitrage is said to be about a $10 million budget picture, and the ultimate separation between director and producer is pinned on a disagreement about its shooting location: Jarecki desperately wanted to shoot the film in New York whereas Ohoven wanted to either move it to a state like Louisiana where  they could pick up state production incentives or shoot the film in NY for less than what was originally budgeted.

In December, Jarecki called off their relationship.

Infinity is seeking damages, a restraining order that would prevent Jarecki from producing the picture using his developmental activities, and another restraining order that would prevent Jarecki from disparaging Infinity and Ohoven within the entertainment community.

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