Chase makes case

Film financier wins reversals in fraud suit

HOLLYWOOD — JP Morgan Chase has won a substantial reversal of a lower court ruling in a London case involving fallout from insurance-backed film financing, a type of production funding popularized by Chase and others a couple of years ago.

Chase, a major financier of Hollywood pics through its Chase Securities unit, successfully argued in Britain’s Court of Appeals to have all but what Chase called a single “narrow” question overturned, with the remaining matter to be appealed to the House of Lords.

Previously, a lower court had found that insurer HIH Casualty and General Insurance could pursue claims involving allegations of fraud stemming from certain Chase financings, and that ruling stands.

The various rulings — with the latest handed down this week — come in a suit filed by a group of insurers including HIH against Chase and its agent, Heath Insurance Broking. The insurers contended they were improperly saddled with losses from film financings they backed on Phoenix Pictures including “The Mirror Has Two Faces.”

“The court vindicated Chase’s position on all issues other than a narrow question of whether insurers can allege fraudulent misrepresentation by the insurance broker as a defense to their (loan) liability,” Chase said in a statement Thursday. “JP Morgan Chase continues to believe that there is no factual or legal merit to the position.”

Chief among what’s been tossed out by the Court of Appeals was the lower court’s ruling that even negligence in connection with Chase’s dealings would be enough to allow HIH to avoid paying on film-loss claims. Fraud is considered much harder to prove in England than simple negligence.

Crowd of claims

The case is being closely watched because there recently has been a spate of litigation regarding claims on movies financed through insurance-backed deals. Such arrangements, briefly popularized but now largely abandoned, have seen some of the biggest worldwide insurance companies saddled with big losses on productions financed through conventional entertainment lenders using contractual safety nets supplied by the insurers.

One of the biggest disputes involves film-loss claims against insurer AXA believed totaling up to $1 billion. Chase and AXA have exchanged litigation over a portion of those claims.

In dispute in the London case are claims totaling more than $35 million, about half of which involved claims against HIH. It was not immediately known if HIH or the other litigants would appeal the portions of the latest court ruling that went against the insurers.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Biz News from Variety

Loading