Pppeals court also ordered trial on claims of fraud

A California appeals court upheld producer Alan Ladd Jr.’s legal victory over Warner Bros., ruling that the studio breached “good faith and fair dealing” in determining his share of the returns on a dozen movies he produced.

The state Court of Appeal also ordered a trial on Ladd’s claims of fraud when the studio told him that the movie “Blade Runner” was so far in the red that it would never make a profit, but he later found that Warner Bros. was making payments to another profit participant in the project.

The court also said there should be a trial for Ladd’s claims that the studio’s removal of credits from the homevideo packaging of “Chariots of Fire” and “Once Upon a Time in America” resulted in him losing leverage in negotiating producer’s fees.

In 2007, a jury awarded Ladd $3.2 million in damages. Much of the trial centered on how the studio engaged in a practice called “straight-lining,” in which it would license packages of movies to TV and cable networks but allocate the same portion of the fees to every movie in the package, regardless of how successful it was. As such, profit participants get their share from a smaller pool of the profits.

At stake were the returns for “Blade Runner,” “Body Heat,” “Night Shift,” “Tequila Sunrise,” “Outland,” “Chariots of Fire” and the “Police Academy” franchise.

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