Paramount has settled a long-running dispute with Content Partners over the returns from a slate of 25 films from the 1990s in the studio’s portfolio, ending bitter litigation in which the studio accused J.P. Morgan of engaging in a “civil conspiracy” over the assignment of profits.
“The matter has been amicably resolved and each of the parties has denied wrongdoing,” said Paul Sorrell of Lavely & Singer, which represented Content Partners in the dispute. He said he could provide no further details.
A summary judgment hearing had been scheduled for Dec. 17. A Paramount spokeswoman had no comment beyond Sorrell’s statement.
The litigation had its origins in a 2010 lawsuit that Content Partners filed against Paramount, contending that the studio short-changed it tens of millions of dollars it is owed from the film slate. Then in June, the studio filed a counterclaim against Content Partners, accusing it of being “the Hollywood equivalent of a patent troll.”
In that filing, the studio claimed that JPMorgan engaged in a “civil conspiracy” to assign its profit participation interest in a slate of movies like “Face/Off,” “Rules of Engagement” and “Runaway Bride” to Content Partners, which buys up profit participation stakes in major entertainment properties. Paramount claimed that the studio’s revenue participation agreements with JPMorgan required that it first obtain consent to make such an assignment.
JPMorgan was not named in Paramount’s counterclaim, but a Los Angeles Superior Court Judge Gerald Rosenberg had recommended that JP Morgan be added as a co-defendant.
In June, Martin Singer, who also represented Content Partners, called Paramount’s counterclaim “defensive maneuvers” that were an effort “to try to avoid what they owe to their co-finance partners.” Content Partners sought at least $165.5 million in compensatory damages.
Paramount said in its counterclaim that through a complex series of transactions, JPMorgan had obtained a stake in the slate in 2004, and in 2007 tried to interest the studio in buying it out. But the relationship soured after Paramount challenged the results of a bank audit. Instead, Paramount claimed that JPMorgan found a buyer in Content Partners, but rather than seek required consent from the studio, it found a “contrived” way to assign rights. The means was to have JPMorgan substitute as a debtor and transfer its position as lender to Content Partners, Paramount claimed.
Singer claimed that Paramount was “well aware” of Content Partners’ involvement in the film slate, and that the studio’s accusations came about because the discovery process in the litigation showed that they have not accounted for about $100 million. He also suggested that the JPMorgan was not named because Paramount has ongoing reliance on investment banks for financing.