(UPDATE with AMC statement) Over four years after former The Walking Dead showrunner Frank Darabont and CAA first took AMC to court in a more than $280 million profit participation action, the duo hit the cabler again today with a new $10 million suit. A suit that AMC is dismissing as being because of the avarice of the uber-agency.
“Having recently completed its audit of AMC’s accounting records, it is now clear that AMC’s wrongful conduct extends well beyond artificially deflated license fees,” said the breach of contract and declaratory judgment-seeking complaint filed this morning in New York Supreme Court (read it here).
“In addition to withholding hundreds of millions of dollars from the creators of the hit television series The Walking Dead through improper self-dealing, which is the subject of litigation between the parties currently pending in this court, AMC has used a variety of shady accounting practices, described below, to withhold tens of millions more,” the jury-seeking filing adds, before settling in for the kicker. “And, Plaintiffs recently learned that AMC attempted to hide evidence related to its self-dealing from Plaintiffs during discovery in the pending litigation.”
Having conducted an audit on the currently eight seasons-and-counting series based on Robert Kirkman’s comics from its 2010 debut up to 2014’s Season 5 with what they thought were documents unredacted to “all provisions of these agreements relevant to MAGR,” Darabont and CAA’s team say that they almost accidentally made a big find late last year. “AMC improperly and egregiously redacted Kirkman’s agreement when it was produced to Plaintiffs in discovery in the prior pending action,” the plaintiffs allege in the new multi-million dollar suit.
“At the heart of this lawsuit — and all the litigation related to The Walking Dead — is the greed of CAA,” said recently brought on board AMC lawyer Orin Snyder, of Gibson, Dunn & Crutcher. “Their goal is every dollar for themselves, with total disregard for contracts, clients, fairness or even basic decency,” added the litigator. “AMC was the only network willing to take a risk on The Walking Dead, after many others passed.”
“AMC has been an honest steward of the series and has paid all of its creative partners handsomely and appropriately,” Snyder additionally asserted of the much sued channel. “This is just another opportunistic lawsuit orchestrated by the most powerful lawyers and Hollywood agents seeking an unjustified windfall and we are confident that it will be defeated in court,” he concluded in his client’s media defense.
This latest revelation came when Kirkman, fellow TWD executive producers Gale Anne Hurd and David Alpert, and former EPs Glen Mazzara and Charles Eglee sued AMC themselves last summer over seemingly being scammed out of contractually obligated Modified Adjusted Gross Receipts. “The defendant AMC Entities exploited their vertically integrated corporate structure to combine both the production and the exhibition of TWD, which allowed AMC to keep the lion’s share of the series’ enormous profits/or itself and not share it with the Plaintiffs, as required by their contracts,” said the complaints that the five producers put before courts in the Empire State and California on August 14, 2017.
Along with those suits over license fees, Kirkman attached a relatively lightly redacted copy of his 2009 agreement with AMC – a version that had some significant differences to what the Charlie Collier run outlet more recently had handed over to CAA and the showrunner it had kicked to curb in 2011 (read it here).
“AMC produced Kirkman’s agreement to Plaintiffs in discovery in the underlying action but redacted the very self-dealing provision at issue, even after agreeing with Plaintiffs that AMC would not redact anything relevant to Kirkman’s profit definition,” today’s complaint asserts with reasoning that contractually Darabont should have been the beneficiary of the “better language” in Kirkman’s 2009 deal. “But the truth has now come out, exposing AMC’s bad faith accounting and its bad faith litigation tactics.”
Likely to be consolidated into the already ongoing legal struggle between AMC and The Shawshank Redemption director and his uber-agency, this latest move comes as all sides await a decision on their respective summary judgment motions from NY Supreme Court Justice Eileen Bransten. While nothing has been formally announced yet by the soon-to-be retiring Bransten, a couple of orders made public earlier this week on motions to seal in the initial case do seem to indicate that some kind of movement on the September 15, 2017 argued summary judgments could be coming soon.
Which means, unless Justice Bransten takes the unlikely route and rejects both summary judgments, it is pretty clear that the December 2013 filed case isn’t going to trial any time soon. Certainly not this year, once the undoubted appeals and more hearings are factored in.
Another twist in this bitter saga that gives further substance to the proverb that “the enemy of my enemy is my friend” also has to be the more than $43.4 million in “unreported” and reduced” receipts that Hacker, Douglas & Company also unveiled for the plaintiffs. Missing big bucks that includes an $18,800 Comic-con TWD banner that was pegged at costing $37,600, and $18 million from electronic sell of the Andrew Lincoln and Danai Gurira led series via iTunes.
Not factored in to this complaint are the lucrative tax credits that TWD received from the state of Georgia, where the show films. However, with AMC accused of moving up to $800,000 in tax credits around on at least one past season and not declaring it as “offset against production costs,” Darabont and CAA’s lawyers at NYC’s Blank Rome LLP and Santa Monica’s Kinsella Weitzman Iser Kump & Aldisert LLP have put the use of all of the incentives in question.
The question is how much the apparent discovery shenanigans will peeve off the sharp tongued Justice Bransten and how will she react? But that’s what lawyers are for isn’t it?
Speaking of which, AMC remains represented by Donald Trump’s personal attorney Marc Kasowitz plus Aaron Marks, John Berlinski, of Kasowitz Benson’s NYC and LA offices.
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