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‘Rules Don’t Apply’ Investor Seeks Permission to Sue Warren Beatty

The litigation over “Rules Don’t Apply,” the Howard Hughes biopic that flopped in 2016, appeared to be all but wrapped up in August, when distributor Arnon Milchan settled his differences with star Warren Beatty.

But there was one loose end. Worldview Entertainment, one of the film’s many investors, has refused to settle with Milchan. The company has now turned on Beatty, filing a motion seeking permission to sue his company. Worldview is arguing in effect that Milchan and Beatty made a sweetheart deal, leaving Worldview on the hook for Beatty’s debt to Milchan.

Milchan filed suit in December 2017, alleging that Beatty and the other investors — who included Brett Ratner, Steve Bing, and Ron Burkle — had reneged on an obligation to pay $18 million in distribution costs. Milchan alleged that Beatty and his friends had driven up the cost to market the film by insisting on a wide release and a futile Oscar campaign. The film grossed just $3.9 million on a $31.1 million production budget.

The investors countered that Milchan had failed to properly market the film, and had fallen asleep during a test screening. The investors reached confidential settlements one by one over the course of the last year.

Worldview — which has endured substantial legal turmoil among its own investors and management — has been the lone holdout. In its motion, the firm revealed that no money changed hands in the Beatty-Milchan settlement. Worldview contends that both sides agreed that Milchan’s company “should focus their energies on recovering first from the Worldview Defendants.”

“The terms of the… Settlement are remarkable, not to mention completely improper and unfair to the Worldview Defendants,” the motion states.

Worldview alleges that Beatty’s firm was the primary guarantor of any shortfall, and that Worldview agreed to step in only as a backstop. The motion states that Beatty’s company assured Worldview that the chances of a shortfall were “remote.”

Worldview is now seeking to sue Beatty for any damages it is forced to pay in its litigation against Milchan. A hearing is set for Nov. 14.

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