Producer seeking damages up to $50 mil
In the wake of last week’s verdict in New York against Axa, film producer George Litto is set to resume his arbitration in Los Angeles against the French reinsurance giant.Said Litto, “After last week’s verdict, I expect to prevail in the arbitration.” Axa could not be reached for comment. The deal that spawned Axa’s fraud case against lender Chase Manhattan Bank involved two lines of revolving credit from Chase to George Litto Pictures worth more than $100 million. Each loan was contingent on insurance from Axa to protect Chase in the event of any shortfall. After Litto’s first film, “The Crew,” was covered by the shortfall, Axa revoked its contract with Litto, and Chase pulled the plug on financing for a five-picture deal, which included a feature version of the TV show “Hawaii 5-0.” Litto’s arbitration against Axa seeking damages of $50 million for pulling out of the deal was put on hold pending the outcome of Axa’s New York suit against Chase. Axa sued Chase in 1999 to nullify a long-term film partnership. Axa charged that Chase committed fraud by roping the insurer into guaranteeing payment on Chase’s film loans. Litto was initially named as a defendant in the Axa suit, but was later dismissed. At trial, he testified on behalf of Chase. Last week’s verdict ordering Axa to pay Chase on the failed loans has been watched with interest because of the slew of cases involving the once-popular insurance-backed financing for indie films.