Tolkien’s Heirs Look to Jury to Settle $220 Million Dispute

by Jul 15, 2009The Hobbit (Movies)

Bloomberg has an excellent writeup detailing all the aspects of the Christopher (J.R.R.’s youngest son) Tolkien’s $220 million dispute against New Line Cinema.

In short, Tolkien’s heirs and their charity, the Tolkien Trust, wants the 7.5% of receipts from the films as their father’s original sale of rights to United Artists detailed. But it’s not only that.  They want the rights of The Hobbit to revert back to them so that they can halt filming of the upcoming, erm, duology and make sure they can get properly compensated.

Here’s an excerpt (or click here for the whole article):

The case, if not settled by then, may provide a window into accounting practices that let Time Warner deny proceeds of the Oscar-winning films to Tolkien’s heirs. The litigation also threatens to derail two “The Hobbit” films that, if their predecessors are a guide, could generate $4 billion in sales.

“Usually it’s not outright thievery by the studios, but death by contract,” said Pierce O’Donnell, the Los Angeles- based lawyer who represented the late columnist Art Buchwald in a successful case against Viacom Inc.’s Paramount Pictures in 1988. “It’s an esoteric world where black doesn’t mean black, and white doesn’t necessarily mean white.”

Tolkien’s family and a British charity they head, the Tolkien Trust, seek more than $220 million in compensation, according to Bonnie Eskenazi, an attorney with Greenberg Glusker, the Los Angeles firm representing the heirs.

The Tolkiens also want the option to terminate further rights to the author’s work, as the original contract lets them do in the event of a breach, according to the complaint. News Corp.’s HarperCollins Publishers, which holds Tolkien’s publishing rights, is also a plaintiff.

The two sides have held settlement talks, Eskenazi said, adding they remain far apart and are proceeding to trial.

“Should this case go all the way through trial, we are confident that New Line will lose its right to release ‘The Hobbit,’” Eskenazi said in an interview.

Time Warner’s attorney, Brad Brian of Munger Tolles in Los Angeles, said in an e-mailed statement today that the contract is ambiguous.

The company is asking Judge Ann I. Jones to reject the heirs’ claim they can revoke rights to the “Hobbit.”

“The studios have historically played hardball in litigation,” O’Donnell said. “Also, these are hard times and they maybe think it’s cheaper to pay the lawyers than to pay a large claim. And maybe the lawyers think they have meritorious defenses.”


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