Originally posted 2014-09-19 11:00:08.
By Christina Severino | amdlawgroup.com
P.E.A. Films, Inc. is seeking to terminate MGM’s (Metro-Goldwyn-Meyer) contracts, which granted licensing rights for three films headlined by Clint Eastwood (“The Good, the Bad and the Ugly” and “For a Few Dollars More”) and Marlon Brando (Last Tango). The films at issue were all produced by P.E.A.’s legendary Alberto Grimaldi. P.E.A. has filed its complaint in New York federal court against MGM, seeking damages starting at $5 million. Specifically, the complaint questions administrative fees in the amount of $1.5 million to 20th Century Fox Home Entertainment for distribution of “The Good, the Bad and the Ugly” and “A Few Dollars More.” The complaint also alleges that MGM has breached its contract with P.E.A. and the covenant of good faith and fair dealing.
P.E.A.’s motivation to file the complaint stems in part from MGM’s, “failure to send to P.E.A. honest and accurate statements together with timely payments.” P.E.A. goes on to specify that MGM has failed to submit more than $10 million in backdated fees and expenses for the film licensing. The licensing rights for the films were granted between the late 60s and early 70s, and the lawsuits have been an ongoing duel since the 1990s. After the initial lawsuit in 1990, there was a settlement in which MGM agreed to not charge distribution fees as an expense before calculating P.E.A.’s share of gross receipts for the home video licensing. MGM also agreed to only charge, “Certain defined expenses.” However, these promises by MGM were short lived as P.E.A. later went on to sue based on auditing claims. This lawsuit stretched over the next three years before the parties reached an understanding.
Despite both parties’ efforts to mitigate, they have continued to battle over the terms of their licensing agreement, and P.E.A. still seeks out any opportunity to squeeze out more profits from MGM. P.E.A. continues to assert that MGM has failed to make sufficient and timely payments. P.E.A. is pointing the finger at MGM’s accounting practices, calling their actions a, “Hollywood accounting catch me if you can process designed intentionally to keep for itself money rightfully due to P.E.A.” Along with monetary damages, P.E.A. seeks cancellation of all its licensing rights contracts with MGM.
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