(1981) Tags: Warner Bros. | Orion
Frank MENKE, et al. v. Daniel GLASS, individually, and Migdal, Tenney, Glass & Pollack, a Partnership
This case involves the investors who funded Sidney Lumet’s 1981 movie ‘Prince of the City’ starring Treat Williams and Jerry Orbach.
Pursuant to a Distribution Agreement between Orion and the investors, Orion was obligated to spend $11.875 million by December 31, 1982 in advertising the film, $4 million of which would be provided by the investors. According to the Distribution Agreement, if Orion spent more than $4 million but less than $11.875 million advertising the film, it was obligated to pay the investors whatever amount in excess of $4 million (up to a maximum of $7.875 million) was not used by January 10, 1990, the same day that the notes became due. As it turned out, Orion spent only slightly more than $4 million in advertising the movie. Hence, under the AEDP, Orion was obligated to repay the partnership the Excess Advertising Funds.
The movie, despite generally favorable reviews, failed at the box office, and on February 25, 1982, the investors were advised of the loss. This lawsuit was filed after the investors loss and subsequent tax disputes pertaining to write offs.
Read the full court report below for further information.