Production house fights blockbuster on 'Monster' fees.In an age of Netflix Inc. and on-demand digital distribution, renting movies from neighborhood outlets is undeniably low tech, but that doesn't mean there isn't money to be made--and fought over. In a suit filed Jan. 31 in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Superior Court, Century City-based Media 8 Entertainment claims that DEJ DEJ Dermal-Epidermal Junction DEJ Deferred Entry of Judgment (court mandated program for nonviolent drug offenders) DEJ Dentoenamel Junction DEJ Dale Earnhardt, Junior Productions Inc., a former subsidiary of Blockbuster Inc., bilked the production company out of more than $8.6 million in licensing fees from "Monster," the movie for which Charlize Theron won a Best Actress Oscar in 2003. Media 8 charges that Blockbuster, through DEJ, depressed receipts of DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. sales to avoid licensing fees. Media 8 audited Blockbuster's records in the summer of 2005 and estimated that its payments were short nearly $9 million, the lawsuit states. "Our complaint alleges, among other things, that Blockbuster unfairly exploited its relationship with DEJ to structure sweetheart deals Sweetheart Deal A merger or company sale where one company involved in the deal gives the other very attractive terms and conditions. Notes: In other words, a sweetheart deal is a transaction that a firm simply cannot pass-up. This is usually considered to be unethical. of the picture," said Media 8 attorney Steven A. Velkei, of Liner Yankelevitz Sunshine & Regenstreif LLP LLP - Lower Layer Protocol . "It's our understanding that the transactions with Blockbuster and its affiliates were below market value, which resulted in a loss of revenues to Media 8 and its profit participants." Velkei said his clients only filed suit after it became clear that they would not be able to come to an informal resolution with First Look Studios Inc., which acquired DEJ in late-2005 and is named in the suit. "We think the claims are baseless and we intend to vigorously defend ourselves," said Blockbuster spokesman Randy Hargrove, who added he could not otherwise comment on pending litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Dallas-based Blockbuster has foundered in recent years, with revenues lost to Internet rental powerhouse Netflix. To compete, the company eliminated late fees, which also cost some revenues. It now faces the prospect of added competition from iPod downloads. Blockbuster posted a loss of $491.4 million, or $2.67 per share, for third quarter 2005 compared to a loss of $1.41 billion, or $7.81 per share, a year earlier. The company, which recently introduced an online video rental program, cited noncash charges Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. and challenging industry conditions for the loss. A heating is scheduled for May 23. BY EMILY BRYSON YORK Staff Reporter |
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