Summary: Action star Sylvester Stallone wants Warner Brothers to reveal its accounting practices.
Will Sylvester Stallone demolish Warner Brothers? The Rocky actor has sued the studio over profits from the movie Demolition Man, and a judge said that the court now wants to look into the company’s accounting practices, according to The Hollywood Reporter.
In April, Stallone and his company, Rogue Marble, sued Warner Brothers, claiming that the studio used shady accounting practices to stiff the star of earnings from the 1993 film.
“The motion picture studios are notoriously greedy,” the complaint that was obtained by THR read. “This one involves outright and obviously intentional dishonesty perpetrated against an international iconic talent. Here, WB decided it just wasn’t going to account to Rogue Marble on the Film. WB just sat on the money owed to Rogue Marble for years and told itself, without any justification, that Rogue Marble was not owed any profits.”
Warner Brothers asked a Los Angeles Superior Court judge to throw out the case, but the judge offered Stallone a big win–the chance to look into Warner Brothers’ accounting practices and see whether or not the studio deceived others in Hollywood who have profit participation agreements with the company.
In Stallone’s lawsuit, he claimed that he had a deal with Warner Brothers that he would receive 15-20% of the defined profits of Demolition Man. He said that Warner Brothers had initially told him that they had lost $67 million on the 1993 film and wanted to pay him nothing but that they later offered him a check for $2.82 million.
Stallone said he was unsatisfied with the amount and wanted to know how well the film actually did. He sued the studio for what he claims are unfair business practices, and his lawsuit has the potential to change the way the industry conducts its accounting.
Accounting in Hollywood is notoriously unreliable. For instance, the creators of This Is Spinal Tap sued the film’s owner for $400 million after they said they were duped to believe the mega successful film was a flop. The owner of the film said they had not lied about the film’s profit.
In Stallone’s lawsuit, the star of The Expendables and Rocky called Warner Brothers “unscrupulous, unethical and offensive.” He requested injunctive relief, wanting Warner Brothers to explain their accounting processes for “all talent who expect to be paid by WB for the fruits of their labor.”
Warner Brothers had asked that Stallone’s case be dismissed, but on Thursday morning, Judge John Doyle denied the request. The studio had tried to argue that the statute of limitations of the 1992 contract could not be argued in court.
“The Court finds that Plaintiff’s allegations as to general fraudulent accounting practices are sufficient to state a claim properly encompassing the general public, or at least competitors who stand to be injured by such practices,” Doyle said.
Stallone’s company, Rogue Margue, is represented by Neville Johnson, and Warner Brothers is repped by Glenn Pomerantz at Munger, Tolles & Olson.
The trial is set for October.
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Source: The Hollywood Reporter