There’s a conspiracy afoot — or at least that’s what Paramount Pictures claims in legal papers that the company filed Thursday.
In a cross-complaint filed by Paramount as part of an ongoing legal action between Paramount and Content Partners, Paramount says that JPMorgan Chase was part of a conspiracy to bilk Paramount.
Though JPMorgan Chase is referred to in the complaint, it is not named as a party in the lawsuit.
Paramount’s cross-complaint claims that Content Partners has engaged in a “years-long scheme” to “defraud Paramount through an unlawful and secret assignment of rights in connection with 25 Paramount motion pictures.”
Paramount contends that Content, which it characterizes as a “scavenger,” has “knowingly and intentionally interfered with Paramount’s contractual relationships, misappropriated its trade secrets, and improperly received and retained more than $35 million in payments by Paramount.”
A spokesman from Paramount told TheWrap that the cross-complaint “seeks relief for a contrived attempt to frustrate Paramount’s rights and tarnish its reputation in relation to a series of film financing transactions.”
Paramount’s suit traces the dispute to loans made in the late ’90s by JPMorgan (then doing business as Chemical Bank) and other banks giving participants interests in studio films. Backed by insurance policies, the loans named the banks as beneficiaries.
However, the insurers later claimed that the loans were fraudulently obtained, causing a dispute. JPMorgan approached Paramount, asking if they would free up money to help pay for the loans.
“Paramount went above and beyond to protect JPMorgan’s interests, unaware that JPMorgan would later join with Content Partners to violate its own obligations under the Revenue Participation Agreements and attempt to extort tens of millions of dollars from Paramount through the assertion of concocted and knowingly false claims,” the countersuit claims.
An attorney representing Content Partners has not yet responded to TheWrap’s request for comment.
According to the countersuit, after the litigation over the insurance policies was settled, JPMorgan was directly assigned the revenue participation agreements.
JPMorgan hired the firm Hacker, Douglas & Company to audit the films covered under the agreements, and that firm claimed “that Paramount had improperly calculated crossing amounts and thereby underpaid more than $20 million in connection with just the audited pictures.” But Paramount said that that finding was refuted by JPMorgan and its lawyers under oath during the insurance litigation.
JPMorgan found a buyer for the movie interests in Content Partners. Paramount contends that Content Partners used confidential information, and the “baseless audit claims,” to negotiate a buyout of JPMorgan’s stake in the participant agreements.
Paramount also claims that Content and JPMorgan concocted a plan to misrepresent Content’s part in the buyout, since Paramount would never “consent to an assignment of rights to a ‘scavenger’ intent on pursuing baseless and bad faith claims.”
Source: The Wrap (by Tim Kenneally)
