'Chicago' creative team sues Miramax for profits

By Matthew Belloni

EXCLUSIVE: The creatives behind the original Broadway musical "Chicago" are accusing Miramax of some accounting theatrics in connection with the hit 2002 film.

Nicole Fosse, heir to director/choreographer/co-writer Bob Fosse, along with composer John Kander and the estate of late lyricist Fred Ebb, today sued Miramax and Walt Disney Pictures., claiming they've been shortchanged by more than $12 million from "the old razzle dazzle" approach to accounting for profits from the best picture Oscar winner.  

The plaintiffs say an audit of the film has revealed "underreporting of more than $165 million in gross receipts (through December 31, 2006) and the overstating of more than $32 million in deductions and exclusions from those gross receipts." They also say millions more in damages are at stake but Disney's participations department has frustrated attempts to execute a full audit.  

"Chicago," directed by Rob Marshall and starring Richard Gere, Renee Zellweger and Catherine Zeta-Jones, grossed more than $300 million worldwide and spawned a hit soundtrack. The creative team claims a 1980 deal assigned to Miramax entitles it to a 4% backend of "'Distributor's Gross Receipts' after 'Artificial Breakeven,'" as defined in the deal. They also claim they have been underpaid their 15% royalty on soundtrack sales from the film.

Disney, which is in the process of selling Miramax, declined to comment on the filing.

Miramax was sued on similar grounds in 2006 by Martin Richards, a producer on the film who claimed that deceptive accounting practices shortchanged him by millions. That case was settled in 2008.

The new case, filed by Stanton "Larry" Stein, Daniel Fiore and Maribeth Annaguey at LA's Liner Grode Stein firm, claims causes of action for breach of contract, breach of implied covenant of good faith and fair dealing, intentional interference with contractual relations, accounting, open book account and declaratory relief.