BREAKING: StudioCanal has filed suit against Universal Pictures alleging failure to honor fiduciary and contractual responsibilities in their longtime joint venture to fund movies produced by Working Title Films. StudioCanal says Universal owes “tens of millions of dollars and likely much more” as a result of an October 2012 audit of the joint venture’s development and overhead expenses on six of 44 movies made through the joint venture. The audit of the expenses, which according to the suit were managed by Universal, revealed that it had hidden certain off-balance sheet financing arrangements and misreported ancillary revenue from music publishing and other sources. The suit (read it here) also claims Universal double-charged the partnership for producing and other fees paid to Working Title without StudioCanal’s approval and deducted millions of dollars in unsubstantiated expenses before reporting results to StudioCanal. ”

StudioCanal says it has attempted unsuccessfully to discuss the audit and claims with Universal. StudioCanal executives flew to LA from Paris in late October for what they believed based on emails was a scheduled meeting with Universal’s team to discuss the situation. When they arrived, the Universal execs claimed they didn’t know anything about such plans, according to the suit. After that meeting Universal stopped providing accounting statements and payments, and StudioCanal alleges that subsequent attempts to communicate with Universal have proved similarly fruitless: “Universal is behaving as if its partner StudioCanal does not even exist”. The suit says Universal’s lack of cooperation has forced StudioCanal to litigate the matter.

StudioCanal’s suit accuses Universal of breach of fiduciary duty, constructive fraud, breach of contract and of implied covenant of good faith and fair dealing plus inaccurate or misleading accounting. The suit seeks actual and punitive damages, a full accounting of the joint venture, court costs and attorney fees.