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Image Sues Relativity for Undelivered Content

8 Apr, 2008 By: Erik Gruenwedel

Image Entertainment Inc. has filed a lawsuit against film producer Relativity Media, claiming it has yet to deliver content spelled out in a 2006 distribution agreement.

The suit, filed April 7 in Los Angeles Superior Court, alleges Los Angeles-based Relativity was supposed to deliver more than 20 movies for release on DVD and electronic media from 2007 through this year in exchange for Image stock and other considerations.

Image would be responsible for all post-production matters, including authoring, compression, creative design, replication, marketing and advertising, sales, and distribution.

Relativity has recently financially backed such fare as Will Ferrell's Talladega Nights: The Ballad of Ricky Bobby, The Fast and the Furious: Tokyo Drift, Inside Man with Jodie Foster and Denzel Washington, The Bank Job, Oscar-nominated 3:10 to Yuma and pending release The Forbidden King.

At the time, Image CEO Martin Greenwald called the deal “the single most significant agreement we've signed in the history of Image Entertainment.”

The complaint contends Image expected to generate millions in home entertainment revenue from several of the aforementioned films. Instead, the suit alleges Relativity conjured the deal to curry favor with Lionsgate, then Image's second largest shareholder and in the midst of a hostel takeover attempt of the Chatsworth, Calif.-based distributor.

Lionsgate eventually halted its takeover bid when Image shareholders rejected the Santa Monica, Calif.-based mini-major's slate of board nominees and subsequently sold its stake in Image.

Lionsgate released 3:10 to Yuma and The Bank Job, with Jason Statham, theatrically in addition to releasing Yuma on DVD and via electronic sellthrough.

A representative from Relativity was not immediately available for comment. Martin Singer, a lawyer who reportedly represents Relativity, told the Los Angeles Times the case was “ridiculous and without merit.”

Singer said the issues with the distribution deal were resolved in 2007, which Image denies.

An Image representative was not immediately available for comment. The distributor is slated to hold an analyst call April 9 on other issues.

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