Universal Pictures on Monday  maintined its “no comment” stance in the wake of the lawsuit initiated by StudioCanal over damage claims relating to a now defunct joint venture to develop, finance, produce and distribute Working Title films.
In papers filed on behalf of StudioCanal at the Los Angeles Superior Court last week [Feb 28], the plaintiff alleges Universal failed to honour “its fiduciary and contractual duties to its partner StudioCanal – for tens of millions of dollars and likely much more.”
StudioCanal is bringing the legal claim after it conducted an audit in October 2012 of the partnership’s development and overhead expenses, which Universal managed.
The audit examined six of the joint venture’s 44 films and focused only on a few territories. The partnership was established when both Universal and StudioCanal were Vivendi stablemates. Titles to come out of the deal included Bridget Jones’s Diary [pictured], Love Actually and About A Boy.
Among other allegations, StudioCanal claims Universal: hid from the partnership benefits derived from off-balance sheet financing; failed to report or reported negligible amounts of ancillary revenues from sources such as music publishing and then produced several million dollars in revenues after receiving the audit reports; retained financial benefits from vendors; double-charged the partnership for producing and other fees paid to Working Title without StudioCanal’s knowledge or approval; and deducted millions of dollars in “unsubstantiated expenses” before reporting result to StudioCanal.
StudioCanal said in the filing it had tried unsuccessfully to discuss the audit with Universal including an occasion in late October 2012 when three executives flew from Paris to Los Angeles after an email exchange between the companies. When they arrived, Universal executives allegedly said they knew nothing of the meeting and were unprepared to respond to the claims.
The causes of action are: breach of fiduciary duty, constructive fraud, breach of contract, breach of an implied covenant of good faith and fair dealing and inadequate accounting.