New Line Being Sued over LORD OF THE RINGS
New Line Cinema just can’t get a break when it comes to the Lord of the Rings franchise; except, maybe, for the estimated $6 billion it made from them. But, according to reports, J.R.R. Tolkien’s estate has announced their intention to sue the studio.
The suit, which was filed Monday of this week, claims that of the 7.5% that New Line was supposed to pay the Estate from the gross receipts, the estate has received nothing. The estate has in fact only received $62,500, which was an upfront payment prior to production even beginning.
"The Tolkien trustees do not file lawsuits lightly, and have tried unsuccessfully to resolve their claims out of court," Steven Maier, an attorney for the Tolkien estate based in Britain, said in a statement. "New Line has not paid the plaintiffs even one penny of its contractual share of gross receipts despite the billions of dollars of gross revenue generated by these wildly successful motion pictures."
This lawsuit has not just arrived out of thin air, as representatives for the estate dubbed The Tolkien Trust have been trying to reach a settlement since the movies hit the big screen. However New Line has been unaccommodating,
Below is the press release from the Tolkien Trust;
The trustees of The Tolkien Trust, a British charity, have filed an action against New Line Cinema for its failure to pay a contractually required gross profit participation in the three films based on the world-famous Lord of the Rings trilogy. The trustees of the estate of JRR Tolkien and HarperCollins Publishers are co-plaintiffs in the lawsuit. The suit was filed today in Los Angeles Superior Court.
The Lord of the Rings films produced by New Line are among the most financially successful films ever created by Hollywood and were released in 2001, 2002 and 2003 respectively. The cumulative worldwide gross receipts to date total nearly $6 billion. Notwithstanding the overwhelming financial success of the films, and the fact that the plaintiffs have a gross participation in each of the films, New Line has failed to pay the plaintiffs any portion of the gross profit participation at all.
The trustees' UK lawyer, Steven Maier, of Manches LLP, said: "The Tolkien trustees do not file lawsuits lightly, and have tried unsuccessfully to resolve their claims out of court. But in this case, New Line has left them no option at all. New Line has not paid the plaintiffs even one penny of its contractual share of gross receipts despite the billions of dollars of gross revenue generated by these wildly successful motion pictures. To make matters worse, to date New Line has even prevented the plaintiffs from auditing the last two films of the series. The trustees are very aggrieved by New Line's arrogance."
The complaint seeks, among other things, in excess of $150 million in compensatory damages, as well as punitive damages, and a declaration from the Court that the plaintiffs have a right to terminate any further rights New Line may have to the Tolkien works under the agreements, including The Hobbit, due to the serious and material nature of the breach of the agreements.
Bonnie Eskenazi, the trustees' US counsel who filed the complaint, said, "New Line has brought new meaning to the phrase 'creative accounting.' I cannot imagine how on earth New Line will argue to a jury that these films could gross literally billions of dollars, and yet the creator's heirs, who are entitled to a share of gross receipts, don't get a penny."
JRR Tolkien is the world-renowned author of the "Lord of the Rings" trilogy and "The Hobbit." The Tolkien Trust is a UK registered charity that has made grants to charitable causes all over the world totaling over $8 million in the last five years alone.
If the Tolkien Trust wins the lawsuit – which all indications suggest that they will – New Line’s plans to produce a pair of prequels – made from the Hobbit and other works by Tolkien – will be doomed. Peter Jackson, who directed the wildly successful LotR Trilogy is already signed on to produce, and Guillermo del Toro has been pegged as director.
Needless to say, another misstep by New Line Cinema has placed the future of Tolkien related movies once again on the brink.