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Warner Bros. Can’t Dodge Sylvester Stallone’s Fraud Lawsuit

Sylvester Stallone has scored an early and significant ruling in his lawsuit against Warner Bros. over profits from the 1993 science-fiction film Demolition Man. Not only has a Los Angeles Superior Court judge rejected the studio’s bid to throw out breach of contract and fraud claims, but the actor is being permitted to bring a potentially big claim that Warners’ accounting practices are likely to deceive the public, including others in Hollywood with profit participation agreements.

Through his loan-out company Rogue Marble, Stallone filed his lawsuit in April.

“The motion picture studios are notoriously greedy,” stated the complaint. “This one involves outright and obviously intentional dishonesty perpetrated against an international iconic talent. Here, WB decided it just wasn’t going to account to Rogue Marble on the Film. WB just sat on the money owed to Rogue Marble for years and told itself, without any justification, that Rogue Marble was not owed any profits.”

According to the lawsuit, Warner Bros. initially asserted that nearly $67 million was unrecouped on Demolition Man and therefore nothing was owed to Stallone, who was to get 15 to 20 percent of defined profits on the film. After being challenged, the studio sent Stallone a check for $2.82 million. The actor wasn’t satisfied.

There are many legal actions targeting “Hollywood accounting,” including the must-watch one from Frank Darabont over The Walking Dead. What makes Stallone’s case provocative — besides an A-list actor suing the same studio that distributed 2015’s Creed, which earned Stallone an Oscar nomination — is a claim of unfair business practices.

Full Read – http://www.hollywoodreporter.com/thr-esq/warner-bros-cant-dodge-sylvester-stallones-fraud-lawsuit-1026520