Village Roadshow challenges arbitration
Award arises from settlement in 1996
The award arises from a settlement in 1996 of proceedings brought in California in 1994. The arbitrator found that VRP (USA) pacted with Meeker & Hool to make two or three movies with minimum budgets of $6 million. The films were not made and the producers claimed lost production fees of approximately $500,000, a share of lost profits and other damages.
VRP (USA) was established in 1988 as a subsidiary of Australia's Village Roadshow to develop and produce low-budget films and TV programs in the U.S. Subsequently, it ceased producing films, and the TV business was sold four years ago but it remains a non-operating entity of Village Roadshow.
Further review sought
Village Roadshow contends that the award is not binding on VRP (USA) until confirmed by the Superior Court of California. VRP (USA) is pursuing various legal avenues of appeal.
Village Roadshow managing director Graham Burke said: "The arbitrator has handed down an award which is incomprehensible and illogical. His own criteria is to compensate the plaintiffs for economic loss that in the ordinary course of things would likely result.
"Yet he has then inexplicably taken the entire budgets of the movies as the basis for awarding damages. He has failed to take into account the fact that even if VRP (USA) had produced these films, the producers would have received only a fixed fee plus a profit participation. Of all theatrical films produced in this budget range, only a miniscule number actually achieve a theatrical release and turn a profit."
