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Thursday, July 25, 2024 | Back issues
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Tolkiens Sue New Line For $150 Million

LOS ANGELES (CN) - The Tolkien family claims New Line Cinema owes them $150 million for their share of profits from the "Lord of Rings" movies. Six Tolkiens claim that because of"insatiable greed," New Line has paid nothing to Tolkien's successors and "crafted a fantasy tale of its own," in claimingthat despite $6 billion in gross revenues, there is not enough money to pay the Tolkiens.

Their complaint says payments tied to the hugely profitable movie are due as a result of"contractually mandated participation in the gross revenues of the films."

"Despite the nearly $6 billion in gross revenues,"the complaint continues, "New Line has crafted a fantasy tale of its own, making the stunning assertion that it has not received sufficient money to play plaintiffs a dime."

The complaint continues: "New Line has clearly engaged in the infamous practice of creative 'Hollywood accounting' - a collection of inscrutable 'bookkeeping' devices that delays payment to profit participants of profit sharing in films, often forever, by a complicated process which excludes certain gross revenues - often the most significant amounts - from the computation and deducts from the reported gross revenues innumerable categories of fees and costs. By finding a way to pay plaintiffs absolutely nothing from these films which collectively grossed nearly $6 billion worldwide, New Line has taken 'Hollywood accounting' to a new extreme. To make matters worse, using New Line's improper accounting techniques, plaintiffs will never see any payment at all on their gross participation."

The 23-page complaint claims that among the Hollywood accounting tricks New Line used was to count only 20 percent of DVD rental revenue as gross receipts, and to allow "the destruction of books and records relating to the determination of revenue and expenses for the films, which document destruction has been heavily sanctioned by the United States District Court for the Central District of California in an action commenced against New Line by director Peter Jackson's production company for, among other things, New Line's failure to properly account and pay to Jackson his appropriate profit participation in the films."

The Tolkiens are represented in Superior Court by Greenberg Glusker Fields Claman & Machtinger.

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