Bit Parts

The California Court of Appeal, Second Appellate District, decided that Twentieth Century Fox Film didn't breach a “Co-Financing/Co-Producing & First Look” agreement by refusing to return an initial payment it received from its deal partner. Smashing Pictures LLC v. Twentieth Century Fox Film Corp., B227872. Smashing Pictures and Fox entered in an agreement covering as many as 20 teen-oriented movies, including four that were already completed and owned by Fox. Though it didn't pay Fox the full $25 million it promised to invest under the agreement, Smashing Pictures sued Fox in Los Angeles Superior Court for breach of contract, seeking return of the $8,618,151 it had paid. The trial court adopted a referee's report in favor of Fox. Affirming, the court of appeal observed in an unpublished opinion that Smashing Pictures argued that because it agreed to get “no interest in the films, then Fox must refund to Smashing the money it has already paid to Fox.” An amendment to the co-financing agreement negotiated after Smashing Pictures failed to pay the full $25 million “appears to address the very question facing the parties,” the court of appeal noted. The court added that the amendment “not only allocated Smashing's partial investment among the Inventory Pictures, but gave Fox 'sole discretion' to reallocate that investment if Smashing failed to provide full funding.”

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