Joel Silver sues Goldman Sachs for $30 millionMon May 17, 2010 @ 07:07PM PST
By Matthew Belloni
Producer Joel Silver today sued Goldman Sachs for breach of contract and fraud, claiming the powerhouse investment bank stiffed him on more than $30 million due from a series of financial arrangements related to films produced by his Dark Castle production company.
The suit, filed in Los Angeles Superior Court by the man behind "Die Hard," "The Matrix" and "Sherlock Holmes," claims Goldman agreed orally and then in written deals to pay Silver $30 million in exchange for a share of revenue from Dark Castle movies. Dark Castle is a division of his Warner Bros.-based Silver Pictures, so Silver is entitled to a participation in gross and net receipts from its films.
In 2007, Silver says he started talking to Goldman, which was keen on expanding into the entertainment business. At the time, Goldman was trying to buy parts of Alliance, the Toronto-based TV/film producer and distributor. The complaint says Goldman planned to use Alliance to pact with Silver's company but Goldman needed a financing partner, so Silver says he introduced the company to Societe Generale de Financement du Quebec Bureau (SGF), which had helped finance Silver's Dark Castle slate of films. Silver says Goldman promised that once SGF helped finance an Alliance deal, Goldman would then finalize a deal with Silver and pay him what was initially agreed to as $35 million.
But after facilitating SGF's investment of more than $100 million in the Alliance transaction, Silver was told that his deal needed to wait until Goldman and Alliance had raised enough money to pay him, the complaint alleges. Silver says Goldman later said it would pay only $30 million, a compromise Silver reluctantly agreed to orally.
In reliance on that promise, Silver says he then entered into a bunch of written deals with Alliance that again promised him $30 million in exchange for a share of his profits from the Dark Castle films, although the written deal was conditioned upon Alliance finding its coveted money within 90 days. But even if the deal didn't go through, Silver says he agreed in a deal signed by Goldman exec Gerald Cardinale that he'd be paid a $2 million finder's fee. He says they later agreed to four payments of $500,000 ending in February 2009. Those allegedly never happened.
"Despite their vast wealth and resources," the Goldman defendants "have repudiated and breached their contractual obligations to pay the Silver Parties at least $30 million, made fraudulent misrepresentations to benefit themselves by over $100 million, and refused to pay substantial amounts due for the valuable services of Silver," the complaint says.
We've reached out to Goldman Sachs for comment and will update with a response.
Ever the showman, Silver also takes a shot at the investment bank's infamously eye-popping bonuses. "Goldman was able to make profits in the billions and to pay its own executives bonuses in the billions, while claiming that it could not arrange for the $30 million owed to the Silver Parties," the lawsuit says.
The plaintiffs are Silver, Silver Pictures and Silver Slate LLC. Defendants are Goldman Sachs, Alliance and Momentum Pictures USA. The complaint was filed by Silver lawyers Bert Fields, Bob Marshall and Ken Basin at Greenberg Glusker, with Thomas Brackey and Craig Huber at Freund & Brackey.