Paramount Pictures and Melrose 2 have come to a settlement in the $375 million fraud lawsuit the investors had with the studio. “The dispute was satisfactorily resolved,” a Paramount spokesman told Deadline today. No details of the settlement were made public in court filings Friday but Paramout intends to seek a full dismissal of the case. Melrose 2, also known as Melrose Investors 2, sued the studio in November 2011 seeking to recover profits from its nearly $375 million investment in 29 films produced by Paramount and DW Studios, formerly known as DreamWorks and then part of Paramount. The investors claimed that they had not received any profits from the deal over movies that made more that $7 billion The movies in question included Mission Impossible 3, Charlotte’s Web, Dreamgirls, Flags of Our Fathers and all three Transformers films, among others. Soon afterwards Paramount said that they were “disappointed that these sophisticated investors would choose to file a lawsuit filled with hyperbole that ignores the true facts rather than seeing that process through to completion” The studio added, “the Melrose 2 investors have already received almost 90% of their investment back under the financing agreement, and a number of the films in which they participate (such as the successful Transformers 3) remain in the earliest stages of their earning potential.” Last July, Judge Michael Linfield trimmed the breach of implied covenant of good faith and fair dealing as well as unfair completion portions of the suit. Ruling that New York law would take precedence over Californa’s in the case, the LA Superior Court determined that the allegations are no different than the breach of contract allegations Melrose Investors 2 had also made in the suit Under New York law, claims on matters based on the same evidence are redundant. On October 4, Melrose Investors 2 admended their initial complaint to claim that Paramount’s owner Viacom was organizing its licensing deals so the studio could hide profits from films such as those mention in the suit.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.