Judge finds Disney breach

Korean financier awarded $6.4 million for 'Patriot'

In a case stemming from the homevideo distribution of Steven Seagal’s “The Last Patriot,” a judge ruled Thursday that Disney breached an agreement that capped distribution expenses and awarded plaintiff Ilshin Investment Co., the Korean financier of the film, damages of $6.4 million.

“We’re very pleased with the result,” said Ilshin attorney Scott Edelman. “We got everything we asked for.”

A Disney spokeswoman said, “We’re obviously very disappointed at the court’s decision and we intend to appeal.”

Ruling from the bench, L.A. Superior Court Judge Aurelio Munoz held that Buena Vista Home Entertainment breached a contract that specified distribution fees were to be capped at $900,000 and that the plaintiff had not consented and, in fact, had objected to fees above the cap.

Munoz also held that Buena Vista was not entitled to stop distributing the title once it determined that it couldn’t make money if it were required to cap expenses.

Damages consisted of the amount over the cap charged to Buena Vista, plus the amount the video would have made if distribution had not been terminated in 2005. Under the agreement, Buena Vista took a 20% distribution fee, as well as expenses. The 1998 film, also known as “The Patriot,” was not released theatrically in the United States.

At trial, Disney made several arguments: that the plaintiff had consented to distribution expenses above the cap, that the cap had been a mistake and that the cap did not apply to marketing costs. Munoz rejected all of Disney’s arguments.

Thursday’s case is the second leg of a 1999 case involving the film’s producer, Patrick Choi, who borrowed funds from Ilshin to finance the Seagal vehicle. Ilshin sued him for failure to repay to loan, but settled the case during jury deliberations. As part of the settlement, Ilshin acquired the right to receive payments under the Buena Vista distribution agreement.