Fictional story leads to real life lawsuit for AMG. (Up Front).

Michael Ovitz's Artists Management Group may be on its last legs, but that hasn't stopped a Hollywood production company from accusing the firm of negligence and misrepresentation.

Alcon Entertainment, which produced "Insomnia" and is backed by FedEx Corp. Chairman and Chief Executive Fred Smith, claims it was duped into buying the rights to a work of fiction it thought was a true story.

Alcon Entertainment filed suit June 26 against AMG and the author of "Williamsport," the tale of an interracial Little League baseball team from rural Alabama that won the Little League World Series in 1955. AMG sold the movie rights to the manuscript to an Alcon subsidiary in February 2001.

In a lawsuit filed in Los Angeles Superior Court, Alcon alleged that the rights were purchased under the presumption that "Williamsport" was a true story. "Now that it has been discovered that 'Williamsport' is not a true story... the project is no longer marketable or commercially viable," the suit maintains. Alcon, which optioned the rights for $35,000 and paid $250,000 for a screenplay based on the work, is seeking $335,000 in damages.

"All we're trying to do is get our actual out-of-pocket costs that we incurred based on the representation that it was a true story," said Bruce Isaacs, partner at Wyman & Isaacs LLP representing Alcon.

Isaacs said Alcon did not investigate the facts of the manuscript before buying the movie rights because it had a good working relationship with AMG.

Selected assets of AMG, founded by Ovitz three years ago, was sold in May to talent management firm The Firm.

Christopher Rudd, a partner at Gorry Meyer & Rudd LLP in Century City representing Joel Gotler, whose Renaissance literary agency was a part of AMG and is named as a defendant, said his clients appear to have little liability in the case.

"They bought a manuscript that was a novel," Rudd said. "They didn't ask anybody if it was true. It's an embarrassing thing from Alcon's perspective when they bought something they didn't bother to read."

According to the suit, the company realized it had purchased a novel only after the screenwriter had delivered the script.

"(E)xecutives noticed that the writer, in preparing the script, had changed some of the facts that appeared in the manuscript," the suit said. The company then "told the writer they did not believe it was appropriate to change the historical facts as they appeared in the manuscript" The screenwriter said he was unable to verify the facts in the manuscript, the suit said.