Warren Beatty Flop 'Rules Don't Apply' Sparks $18 Million Lawsuit Over Losses

Rules Don't Apply Still 4 - Publicity - H 2016
Francois Duhamel/Twentieth Century Fox

Warren Beatty's production company is being sued by Regency Entertainment for allegedly failing to pay back costs for the 2016 film Rules Don't Apply.

Regency claims it entered into talks with Beatty in 2013 to finance and distribute the Howard Hughes biopic, which was written and directed by Beatty and who also starred in the film as Hughes. The distributor claims it agreed to incur substantial upfront costs which were to be recouped from the film's revenues. In addition to distributing Rules Don't Apply, Regency says it also invested $2.5 million in the project and entered into separate shortfall guaranty agreements with the other investors.

"The Defendants agreed to guarantee any shortfall of the amounts incurred by Regency and to pay back to Regency and costs that were not recouped from the Picture's revenues within a specified time period," writes attorney Richard Kendall in the complaint filed Friday in Los Angeles County Superior Court.

Despite its star power, the $25 million film only grossed $3.9 million worldwide. "It was not a commercial success," writes Kendall, adding that the distribution costs exceeded the receipts by more than $21 million.

To date, Regency claims, the defendants have refused to pay any of their guaranteed obligations.

Regency is suing Beatty's Tatira and several other investors in the project for breach of contract and is seeking at least $18 million in damages.