Producer Claims New Line ‘Racketeering’ in Acquiring ‘Conjuring’ Rights

Producer Tony DeRosa-Grund, who has been involved in litigation with Warner Bros. over the rights to “The Conjuring” and “Annabelle,” is claiming that New Line Cinema and one its senior executives engaged in a racketeering conspiracy to wrest control of the properties.

In a filing in a Texas federal court on Wednesday, DeRosa-Grund claims New Line Cinema LLC and Craig Alexander, its senior VP and head of business and legal affairs, misrepresented to a bankruptcy court its intentions for the rights to the files of Ed Warren and Lorraine Warren, the real-life paranormal investigators who inspired “The Conjuring.”

Instead, it transferred the rights to parent Warner Bros., and the studio “assumed no obligations” to comply with New Line’s rights agreements even though it reaped the financial benefit, DeRosa-Grund contends.

A Warner Bros. spokesman said, “The case has no merit and we will vigorously defend it.”

DeRosa-Grund had obtained the rights to the files, but was forced into involuntary bankruptcy in 2009. He claims New Line, in its deal memo with him and his Evergreen Media Holdings, gained “enormous leverage” by intervening in the proceeding and making sure that it would be the only option when it came to winning bankruptcy trustee approval for a rights deal. So if DeRosa-Grund’s Evergreen Media Holdings sought to make any future movie rights deal based on the case files, it would have to get separate approval from the bankruptcy court, the suit claims.

But DeRosa-Grund claims New Line and Alexander never stated that his producer fees would be limited to an initial movie, even though they included the term “sequels” in the court-approved document. He claims they represented to him that he would be attached, paid and credited as a producer on any and all sequels, prequels or remakes, something that was an inducement for the bankruptcy trustee because it would increase the size of his estate.

He also claims there was nothing in the deal memo that required his company’s trademark rights to “The Conjuring” be transferred to Warner Bros. or New Line.

“At no point in time during negotiations did [New Line and Alexander] request that any other rights, besides theatrical motion picture rights, be granted to New Line Productions and, by automatic assignment, Warner Bros.,” the suit states.

DeRosa-Grund even cites an ongoing dispute between Harvey Weinstein, Warner Bros. and New Line over the returns from “The Hobbit” movies as part of the “ongoing pattern of racketeering activity.”

DeRosa-Grund also claims that, after making a deal with him and his company, New Line and Alexander began direct negotiations with Lorraine Warren in late 2010 or early 2011, even though she already had the existing agreements.

He also contends that New Line and Alexander falsely represented that they had no interest in negotiating television rights to the Warren files. But when he tried to make a deal with Lionsgate, he claims, New Line argued that it retained those rights, and Lionsgate terminated the project. He also claims that he is owed more than $2 million in producer and rights fees.

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