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Old 02-15-2008, 07:35 PM   #54
William Cloud Hicklin
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William Cloud Hicklin is battling Black Riders on Weathertop.William Cloud Hicklin is battling Black Riders on Weathertop.William Cloud Hicklin is battling Black Riders on Weathertop.
Quote:
34. Notwithstanding New Line's obfuscation, even the partial audit revealed that New Line has failed and refused, and continues to fail and refuse. to properly account, calculate and pay the Gross Receipts Participation due and owing to plaintiffs under the 1969 Agreements in numerous ways, including but not limited to the following:

a. Substantially understating Gross Receipts earned on the Films by, among other things, underreporting hundreds of millions of dollars in domestic and international home video/DVD receipts, improperly and intentionally excluding Gross Receipts received by New Line and its affiliates in connection with the Films. failing and refusing to calculate Gross Receipts "at the source" where New Line or its affiliates have self-distributed the Films or distributed it through a "rent-a-system," joint venture or other similar arrangement;

b. Substantially overstating purported costs and expenses associated with the Films by, among other things, improperly including hundreds of millions of dollars in participation payments and bonuses for certain talent. production companies and prior rights holders, including without limitation New Line's predecessors-in-interest Zaentz and Miramax, improperly including hundreds of millions of dollars in purported worldwide advertising, publicity and promotional costs; improperly claiming hundreds of millions of dollars of purported overhead, administrative, supervisory or similar charges; and accruing hundreds of millions of dollars of participations not yet due or payable;
...
d. Improperly charging plaintiffs with millions of dollars as a purported "overbudget penalty," phantom interest charges and/or other similar charges in calculating the Artificial Payment Level;
....
g. Failing and refusing to deduct from the costs of production amounts received by New Line and/or its affiliates in the form of production tax subsidies, rebates, and the like.
Seems the industry hasn't mended its ways since the Buchwald case.
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