[Sauron the White]

from Variety

Zaentz, New Line in court
'Rings' brings more rancor
By JANET SHPRINTZNew Line and Saul Zaentz are back in court again fighting over Zaentz's share of profits from the spectacularly successful "Lord of the Rings" trilogy.
In a suit filed Thursday in L.A. Superior Court, Zaentz alleges that New Line has refused to make records available to Zaentz's auditors and allow them to conduct an audit, making it impossible to verify whether his profit participation statements are accurate.

The complaint also notes that New Line and Zaentz are currently involved in arbitration. The nature of the arbitration is not specified, but the complaint alleges that New Line is attempting to leverage a settlement of some claims being arbitrated by refusing to perform its audit obligation until Zaentz agrees to resolve other claims in the arbitration.

The suit seeks unspecified money damages, as well as an accounting.

Zaentz first sued New Line in 2004, claiming he was owed $20 million under the license agreement, based on how gross receipts from foreign distributors were calculated. That suit settled the following year for an unspecified amount, but not before it was revealed in court papers that the octogenarian mogul already had collected $168 million from the three movies.

Zaentz purchased the rights to the "Lord of the Rings" novels, as well as "The Hobbit," in 1976 from United Artists. In 1997, Zaentz entered into a license agreement with Miramax to produce and distribute a "Rings" trilogy. Under the agreement, Zaentz would receive gross profit participation and the right to audit Miramax's books. Miramax assigned its rights under the agreement to New Line in 1998, and the terms of the license agreement with Zaentz remained the same.

In addition to the suits with Zaentz and a host of much smaller lawsuits, New Line also has been battling with director Peter Jackson over profit participation on the trilogy since he filed a lawsuit in 2005.