5:19pm PT by Ashley Cullins
Starline Countersues TMZ in Celebrity Tour Bus Dispute
A celebrity sightseeing tour company and an entertainment gossip outlet may seem like a match made in heaven, but Starline Tours of Hollywood and TMZ can't seem to make their partnership work — and now they're suing each other in California federal court.
TMZ's lawyers threw the first punch in February when they sent a termination letter to Starline, followed by a second blow in March when TMZ sued. TMZ's lawsuit claims the two companies are supposed to split revenue, but that Starline has missed every payment deadline for the past two years and wasn't putting 90 percent of the revenues into the dedicated bank account their contract required.
Then to add salt to the wound, Harvey Levin announced earlier this month that TMZ intends to keep the tour going without Starline.
Starline hit back with a multimillion dollar suit of its own on Monday, claiming TMZ is fabricating the breach of contract allegations to get out of their non-compete clause.
"From the beginning of the partnership between TMZ and Starline to February of this year, TMZ never once objected to Starline’s established course of performance regarding the handling of tour revenues and its use of the Dedicated Account," states the complaint. "TMZ’s maneuvering is designed to pave the way to cut out and improperly compete with its business partner to take the profits from the tour bus venture for itself alone."
Starline is suing for breach of contract, breach of fiduciary duty and unfair competition, claiming TMZ not only inappropriately terminated their agreement but also used the partnership's funds to pay for its own TMZ-branded tour. The tour company says it is owed at least $3 million in compensatory damages, plus punitive damages and disgorgement of TMZ's profits from its new tour.
TMZ's parent company Warner Bros. Entertainment also is named in both suits.