Weinstein Brothers Sue Warners|for $75 Million for ‘Hobbit’ Films

MANHATTAN (CN) - Miramax and the Weinstein brothers sued New Line Cinema and Warner Bros. for $75 million, in a dispute over "The Hobbit" movies.

The Weinsteins claim the defendants are cheating them out of their share by splitting "The Hobbit" movie into a trilogy, and denying them their 5 percent cut of two of the three installments.

"This case is about greed and ingratitude," the lawsuit begins, in New York County Supreme Court. "It arises in connection with a decision by Warner Bros. and New Line executives to divide a motion picture based on J.R.R. Tolkien's 'The Hobbit' into three installments and Warner Bros and New Line's claim that, as a result of that unilateral decision, plaintiffs are not entitled to their previously agreed upon share of revenue from 'The Hobbit' film. Warner's position is simply an improper attempt to deprive the people originally responsible for hugely successful films being made from the works of J.R.R. Tolkien of their right to share in revenue from two out of the three filmed installments of Tolkien's 'The Hobbit.'"

Harvey and Robert Weinstein claim they sold New Line the rights to J.R.R. Tolkein's four-book saga, "The Hobbit" and "The Lord of the Rings" trilogy in 1988.

"New Line acquired these film rights after plaintiffs already spent over $10 million developing the film adaptation of Tolkien's works," the complaint states. "In exchange for the film rights, New Line promised to pay plaintiffs contingent compensation of, among other things, 5% of the gross receipts of the 'first motion

Picture' based on the books, but specifically excluding any contingent compensation for 'remakes.'"

After the massive commercial success of the "Lord of the Rings" movies, Warner decided to make "The Hobbit," and "unilaterally decided" to split it into three parts, the Weinsteins say.

"Using its unilateral decision to divide 'The Hobbit' motion picture into three installments as a pretext, Warner now claims that it can keep all the revenues from the second and third installments of 'The Hobbit' and that it does not need to pay Plaintiffs their 5% contingent compensation because, according to Warner, the second and third installments of 'The Hobbit' are not the 'first motion picture' based on 'The Hobbit' and are therefore effectively remakes, which are not covered by the parties' agreement," according to the lawsuit.

Calling parts two and three of a new movie "remakes" is an "absurd position," the Weinsteins say.

"Warner's position is particularly outrageous because the parties' agreement specifically includes a 'most favored nation' provision promising plaintiffs they would be paid in a manner that is no less favorable than Peter Jackson, the director of all the installments of 'The Hobbit' film. Warner's refusal to acknowledge plaintiffs' participation rights is nothing more than a shallow attempt to deprive plaintiffs of their fair and previously agreed to share of revenue from Warner's exploitation of 'The Hobbit' book. Warner's position is inconsistent with the parties' intent, the terms of the parties' written contract, Warner's own director's statement that each of 'The Hobbit' installments was written and shot as part of a single motion picture and Warner's projections, budgeting and negotiations relating to 'The Hobbit.'"

The 8-page lawsuit includes 52 pages of exhibits and attachments.

The Weinsteins demand declaratory judgment and at least $75 million in damages for breach of contract, breach of faith and promissory estoppel.

They are represented by David Boies and Motty Shulman, with Boies, Schiller & Flexner, of Armonk.

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