Court halts 'I Love You Phillip Morris' release! Will the movie ever come out?

By Eriq Gardner and Matthew Belloni

EXCLUSIVE: A California District Court judge has issued a preliminary injunction preventing the U.S. release of the indie comedy "I Love You Phillip Morris," starring Jim Carrey and Ewan McGregor.

The Glenn Ficarra/John Requa film, about a married man who gets into a car crash, discovers he's gay and goes on a crime spree that eventually lands him in jail, was produced by French movie studio EuropaCorp, which licensed domestic rights to Consolidated Pictures Group. We saw the film at its premiere at Sundance in 2009, where it received a warm but not overwhelming response. Buyers weren't exactly jumping at the difficult subject matter, but upstart distributor Consolidated took U.S. rights and planned to release it, first in February, then March, April, and then July.

However, the Luc Besson-backed EuropaCorp says it never got the full $3 million advance that Consolidated agreed to pay last year. An agreement between the two parties was amended in February to allow Consolidated to pay in three installments, but EuropaCorp says it still didn't receive any money. 

In April, EuropaCorp rescinded its distribution agreement and filed a lawsuit against Consolidated alleging breach of contract and copyright infringement. The studio demanded the return of the movie and marketing materials. Gossip sites suggested they were looking for another distributor.

In response, Consolidated argued that EuropaCorp hadn't delivered the film on time, had breached its agreement by entering into distribution agreements with Virgin Atlantic and other airlines, and that its failure to pay wasn't a sufficient material breach. Consolidated requested a stay so it could hash out the dispute in an arbitration proceeding at the IFTA.

Now, in her decision, California District Court Judge Dale Fischer says EuropaCorp is likely to succeed on the merits of its claims and portrays the defendant's arguments as weak. As a result, the judge has granted EuropaCorp's request for an injunction provided it put up a $500,000 bond pending the ultimate outcome of the case. The dispute will now head to the IFTA arbitration, hopefully within the next two months, we're told.

"This was only a preliminary ruling pending a final determination by the arbitrator," says Consolidated's lead attorney Robert Chapman. "We believe the arbitrator will find in favor of my clients."

Lawyers for EuropaCorp didn't respond to a request for comment. UPDATE: Europa attorney Dale Kinsella tells us the following: "No amount of spin from Consolidated can mask the fact that Europa persuaded a federal district judge that Consolidated breached the contract by never having paid a dime for this picture, and that they had therefore no right to claim to be a distributor or claim to distribute the film, period. Nothing in the judge's order in any way effects Europa's right to distribute the film from this point forward."

Regardless of the outcome, the film won't be in theaters next month as planned. In fact, the movie's website has even disappeared, and we're told October is now Consolidate's target release date, just in time for Oscar season.