Morgan Creek sues Franchise
Co. alleges breach of first-look contract
According to the complaint, filed in L.A. Superior Court on Friday, the two companies signed an agreement in 1998 under which eight pictures produced by Franchise would be distributed by Morgan Creek in the United States and Canada. The agreement also gave Morgan Creek the right of first refusal on other pictures.
On the pictures to which Morgan Creek claims a right of first refusal, the complaint alleges Franchise breached its agreement by entering into a distribution deal with Warner Bros. to distribute "Red Sun Rising," "A Sound of Thunder," "Ecks vs. Sever" and "A Wing and a Prayer" without giving Morgan Creek adequate information about the films.
Morgan Creek also claims that "Driven" and "City by the Sea" were never shown to Morgan Creek as required.
Morgan Creek alleges that on the film "The Whole Nine Yards," Franchise owed it profit participation of 15% of net receipts, after accounting for film negative costs, certain distribution fees and other specified expenses.
But Franchise also deducted such costs as a $10 million reserve for its litigation against Intertainment, according to the suit.
After eliminating this and other expenses, Morgan Creek claims it is owed $992,191 on the film. Morgan Creek also seeks unspecified damages in excess of $1 million for breach of the distribution agreement.
The Morgan Creek suit, filed by attorney Patricia Glaser, is the latest turn of the litigation wheel. Franchise and Intertainment have been in litigation since late last year, with Intertainment claiming that Franchise inflated budgets and Franchise claiming breach of its output deal.
Franchise attorney Larry Stein said Monday he had not yet seen the Morgan Creek complaint and could not comment.
