Major development regarding Animal Logic and the live action Astro Boy movie:
Jason Lust, who is supposed to be one of the executive producers for the live action Astro Boy movie, has sued Animal Logic's CEO, Zareh Nalbandian, "for breach of contract, breach of fiduciary duty and fraud (among other causes of action) based on what Lust claims were misrepresentations and false promises relating the formation of a partnership to produce childrens entertainment." Nalbandian is supposed to be a producer for the film.
What this means for the live action Astro Boy is either one of two things: a delay for the movie past it's tentative 2019 release date, or the possibility of the movie being cancelled. It all depends on how this case plays out.
Forbes wrote:Producer Claims Fraud In Connection With Children's Entertainment Partnership
In a complaint filed on Halloween, former Jim Henson Company executive Jason Lust sued Animal Logic Entertainment and its Chief Executive Officer Zareh Nalbandian for breach of contract, breach of fiduciary duty and fraud (among other causes of action) based on what Lust claims were misrepresentations and false promises relating the formation of a partnership to produce childrens entertainment. Lust alleges that Animal Logic and Nalbandian sought to capitalize on his entertainment industry contacts and on the intellectual property Lust controlled by falsely promising to form a partnership, when they allegedly had no intent of actually doing so. According to the complaint, Lust used his connections and resources to set up various motion pictures including Peter Rabbit and Betty Boop for Animal Logic at major studios and that, once the lucrative studio deals were in place, Animal Logic disavowed its promises. Lust claims that he was supposed to be a Priority Producer on the projects he set up and that he has yet to receive a penny for his work on any of the projects. In addition to damages, Lusts complaint seeks declaratory relief regarding his intellectual property rights in projects he pitched to studios on behalf of Animal Logic (including Monkeys, Betty Boop, The Life and Adventures of Santa Clause, Spy v. Spy, Astro Boy and Fortunately The Milk.)
Lusts complaint attaches a short form agreement that Lust claims was supposed to be superseded by a long form contract confirming the terms of the alleged producing partnership. Contrary to Lusts partnership claims, the short form says that the agreement is at will, and could be terminated on four months notice. It also contains language suggesting that Lusts involvement was as an independent contractor, not partner.
Cases that attempt to recover in tort by turning what is essentially a breach of contract case into a fraud case are generally difficult to win. The words of a signed written contract such as Lust has with Animal Logic are hard to overcome with claims of fraud. For example, Lusts claim that he was defrauded into signing over his intellectual property rights with respect to Peter Rabbit is likely to be an uphill battle given the clause in the short form agreement stating that the copyright and all intellectual property related to Lusts producing services would be assigned to Animal Logic. Since Lust promised to assign his intellectual property rights in the written contract, its will be hard to convince a judge (or a savvy jury) that he was conned into doing so.
Lawyers often plead fraud claims in companion with contract claims because fraud carries the prospect of punitive damages (contract claims dont) and can greatly increase the potential value of the case if it can be proved. Lusts complaint claims that various e-mails between the parties and other documents support his fraud claims. None of these documents are attached to the complaint. What these documents actually say is likely to be highly significant to the ultimate outcome of the case and to the fraud claim. People can be careless in writing e-mails and often say things that they would never put in a letter or other more formal communication. If Lust has e-mails that smack of fraud or contain damaging statements against Animal Logic he may be able to prevail on his fraud claim notwithstanding contrary language in the written agreement. Lusts contract claim for unpaid producer fees should be more straightforward and easier to win (depending on the actual facts) because the written agreement provides that he is entitled to producer fees in certain circumstances.