Paris-based StudioCanal has hit Universal Studios with a legal action alleging that the American studio owes “tens of millions” and “likely much more” over a partnership deal that’s gone sour.
StudioCanal and Universal formed a joint-venture movie production arm back in 1999 and together produced plenty of hits including ‘Bridget Jones’s Diary’, ‘Frost/Nixon’, ‘Billy Elliot’, ‘Love Actually’ and another 40 or so films under the Working Title banner. Each party had the distribution rights to different territories and were obliged to account to one another for all financial transactions.
StudioCanal says it conducted its own audit on 6 movies from the partnership and found “millions of dollars” in missing revenues. “Those audits revealed that Universal was violating its fiduciary and contractual obligations to StudioCanal,” the lawsuit argues. The action claims Universal deliberately hid money from off-balance-sheet financing arrangements and also failed to report additional revenues from other elements such as music publishing, and double-charged the studio for producing fees paid to Working Title, and deducted millions of dollars in “unsubstantiated expenses.”
The pair have evidently been arguing over the matters for some months although talks recently broke down, hence the legal moves. “In fact, Universal has simply stopped communicating with StudioCanal at all, not even to acknowledge the passing of dates by which Universal had promised a substantive response,” the suit claims.