LOS ANGELES (CN) - Producers of comedy-drama film "Spring Breakers" set up a side deal with the movie's distributor to siphon off revenue at the expense of investors, an investor claims in court.
Wicks Walker and his company Division Entertainment dba Division Films sued Spring Breakers LLC, Muse Productions, Chris Hanley and Jordan Gertner in Superior Court, alleging breach of contract, breach of faith and fair dealing, and other counts.
Walker claims the defendants owe him more than $1.3 million based on his initial 2012 investment of $700,000 in filmmaker Harmony Korine's indie movie.
Korine is not a party to the complaint.
Walker says he never received a promised executive producer credit on "Spring Breakers," which starred James Franco, Selena Gomez, Vanessa Hudgens and Ashley Benson.
"Without Walker's funds, it is highly doubtful that the picture would have been made, the principal actors secured or other investors attracted to the project. Indeed, it is likely that the film would have suffered the fate of thousands of other projects each year which die a quiet death for lack of financing," Walker's 27-page lawsuit states.
According to Walker, after "Spring Breakers" was finished, Hanley and Gertner decided to forgo a $2.25 million upfront offer from the Weinstein Company in favor of a "sweetheart" distribution deal with nonparty A24 Films.
Unlike the offer tabled by the Weinstein Company, A24 did not guarantee a return to investors, Walker says.
"The A24 deal substantially undermined the ability of Walker and the other investors to recoup their investment or any return thereon, and resulted in self-dealing on the part of defendants," the lawsuit states.
A24 was allowed to spend "virtually unlimited funds" on the movie's print and advertising, Walker claims. He adds that A24 was allowed to recoup all the money it spent marketing the movie and was entitled to a 20 percent return before investors got to see a penny.
Walker claims Hanley and Gertner arranged a "side deal" with A24 to "siphon off" distribution revenue for themselves and their friends.
"As a result of the side agreement with A24, not only A24 itself, but defendants and their friends and business associates funneled their money through A24 to exploit the P&A [print and advertising] loophole. By allocating their monies to P&A for the picture, defendants received an immediate virtually risk-free 20 percent return on all funds so designated," the complaint states.
Walker claims that without that loophole the film's investors would have received a return of more than $5 million. Instead, he says, the money went into the pockets of Hanley, Gertner and their friends and business associates.
Investors were left holding an empty cup, according to the complaint.
Walker claims the damages add up to $216,227 from his initial $700,000 investment, a 25 percent premium of $175,000 due on that investment, and $1 million for his contribution to almost 15 percent of the "Spring Breakers" $4.7 million budget.
After its release in March 2013, the movie made $14 million at the box office, according to Walker. Deadline Hollywood reports that the movie made $31.7 million worldwide.
A "Spring Breakers" sequel is reportedly in the works, with "Trainspotting" author Irvine Welsh writing the screenplay. Korine is not attached to direct the sequel. Walker seeks an accounting, repayment with interest, a constructive trust, and costs.
Walker is represented by Gregory Fayer, of Fayer Gipson.