Film investors sue Paramount for losses
Sources close to MTV Networks confirmed Wednesday that about 300 staffers have been let go across the cable congloms’ platforms.
Calls to MTV late Wednesday were referred to parent company Viacom. Spokespersons at Viacom were unavailable late Wednesday.
Along with layoffs at MTV, 100 staffers reportedly lost jobs at sibling Paramount. The studio didn’t return calls seeking comment.
If true, those layoffs would be occurring as a group of film financiers is suing Par, alleging the studio made misrepresentations that led to losses of $40.1 million.
The lawsuit, which was filed Tuesday in U.S. District Court in Manhattan, stems from investments totaling $231.2 million made in a slate of pics produced and distributed by the Melrose studio between April 2004 and March 2006, according to Dow Jones.
The investors — units of Allianz, Munich Re, NewStar Financial and Marathon Structured Finance Group — claim Paramount failed to inform them that it had curtailed the use of international presales to finance the slate.
The slate included “Mean Girls” and remakes of “The Stepford Wives” and “The Manchurian Candidate.”
The investors also allege Paramount failed to disclose that the films wouldn’t be covered by insurance wrap co-financing — the practice of transferring the risk of a poor-performing slate of films to insurers in exchange for a premium.
“We are disappointed that these sophisticated investors, who agreed to accept the widely known risks of investing in a slate of motion pictures, are attempting through litigation to undo the bargain they struck in 2004,” a Paramount spokesman said in a statement. “We intend to establish in court that these allegations are entirely without merit.”
(Tatiana Siegel contributed to this report.)