While SAG’s in the third month of a stalemate over its feature-primetime contract, it’s quietly moving to settle a lawsuit over how it disburses millions of dollars from foreign tax revenues to actors.

Settlement talks will start this week over the suit by Ken Osmond, alleging SAG mishandled those funds and lacks the authority to oversee them in the first place.

Osmond’s allegations brought to light SAG’s disclosure last year that it had collected $8 million of the foreign funds for its members. And the guild’s asserting that those foreign funds are separate from more than $25 million in “unclaimed residuals” it hasn’t distributed to more than 66,000 people — including heirs of John F. Kennedy, Clark Gable, Freddie Prinze and Red Foxx along with such notables as Alan Ladd, Mick Jagger, Keith Richards, Michael Dukakis, Maureen Reagan and Nancy Reagan.

Duncan Crabtree-Ireland, SAG’s deputy national exec director and general counsel, denied that allegation in the Osmond suit. “While we believe this litigation is unnecessary and regrettable, and we intend to vigorously defend it, we are also engaged in good-faith discussions with plaintiff’s counsel to attempt to resolve their concerns without the need for further litigation,” he said.

What’s at stake in Osmond’s suit are so-called “foreign levies” collected from countries by such mechanisms as taxes on video sales and/or rentals to compensate copyright holders for reuse. SAG, the WGA and the DGA began tapping into the foreign funds in the early 1990s on behalf of both members and nonmembers who had a stake in films and TV programs.

Osmond has contended SAG overstepped its authority to make those agreements and never disclosed them until he and Jack Klugman threatened to file suit. The other suits on the foreign levies issue were filed in 2005 against the WGA by William Richert and in 2006 against the DGA by William Webb, who settled his suit earlier this year.

Crabtree-Ireland said he could not comment on when the Osmond suit would be concluded. And he insisted the foreign levies are not part of unclaimed residuals — which are listed on the SAG website and include other notables such as Gabriel Byrne, Tony Dorsett and Bill Paxton along with the heirs of Walter Brennan, Roy Rogers and Danny Thomas.

Crabtree-Ireland said well-known SAG members may appear on the unclaimed residuals list for many reasons — such as moving or changing representation, then failing to inform SAG of the new contact information, resulting in funds going into trust temporarily.

“For others, there may be legal disputes over their residuals, including business disputes or family law issues,” he added. “For deceased performers, there are often disputes over entitlement to their estate’s assets (including residuals) or the estate may have failed to provide the documentation required for SAG to turn over residuals to the executor or beneficiaries. And, of course, there are some well-known actors who leave the industry or take time off and may be more difficult to find than one might expect.”

The exec also said SAG’s staff in its Trusts & Estates Dept. works full-time to find performers and help them claim their residuals.

The issue of SAG’s authority to handle those funds is also under challenge from Eric Hughes — who has monitored the issue extensively at his screenrights.net site.

“I am aware of the names on the list and they have not all performed in guild signatory projects,” Hughes said. “The only way SAG can be in possession of monies belonging to Francisco Rabal, President Kennedy, Laurel & Hardy and Julian Lennon is through foreign royalties, although without any authority.”

The foreign levies for U.S. creatives began to flow after the American agreement in 1989 to sign terms of the Berne Convention, which establishes the right of authorship for the individuals who create works of art.

Hughes, a member of both the WGA and SAG, said SAG has mischaracterized how the guild has handled the foreign levies issue. For there to be a resolution, he added, the guild needs to disclose the original agreements signed in the early 1990s with the AMPTP and banks in the Netherlands.

Los Angeles attorney Neville Johnson is representing the plaintiffs in all three cases. Paul Kiesel, who represented victims in the Los Angeles clergy abuse case, also came on to represent Osmond recently.