Arbitrator denies $11 million distributor claim on Spike Lee's 'St. Anna'

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Arbitrator denies $11 million distributor claim on Spike Lee's 'St. Anna'

Tue Jan 05, 2010 @ 10:23AM PST

By Eriq Gardner

Spike-lee A recent arbitration decision illustrates how big-name directors like Spike Lee can often find themselves in tough spots.

After finishing shooting of his 2008 film "Miracle at St. Anna," Lee had a difficult choice to make

Producers had obtained an $11 million loan from Fortis Mediacom to finance the film. Another company, Film Finances Inc. issued a guarantee on that loan that the film would be completed and delivered to the international distributor TF1 International according to certain criteria, including a running time of less than 2 hours and a requirement that the film be based on an approved screenplay.

Lee initially made "St. Anna" with a running time of 2 hours 40 minutes, meaning he could deliver it to TF1 in violation of the time limit or he could cut the film's length and risk the gripe that the film didn't match the approved screenplay. A no-win situation.

Lee cut the film — and TF1 refused to pay because the film was no longer based on the approved screenplay.

The action kicked off litigation between the financier and the completion bond guarantor. Film Finances argued in an IFTA arbitration that it had satisfied its obligations to complete the film. Fortis said it didn't and attempted to recover $11 million.

An arbitrator in the case has ruled in favor of Film Finances, denying the $11 million claim and awarding attorneys fees.

"We are pleased with the award," said Garry Gans, a partner at Quinn Emanuel who represented Film Finances. "It vindicates not only Film Finances, but also Spike Lee's right to make a film reflecting his vision of a significant historical event."

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The Hollywood Reporter, Esq. blog focuses on how the entertainment and media industries are impacted and influenced by the law. It is edited by Matthew Belloni with contributions from veteran legal reporter Eriq Gardner and others. Before joining The Hollywood Reporter, Belloni was a lawyer at an entertainment litigation firm in Los Angeles. He writes a column for THR devoted to entertainment law. Gardner is a New York-based writer and legal journalist. Send tips or comments to Matthew.Belloni@thr.com

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