Watchmen Lawsuit Pt. 29: One Dollar Buys the Right to Millions Worth of Litigation
Fox and Warner Brothers have settled the Watchmen legal case but Warner Brothers is probably examining their legal options against those who sold them the Watchmen film rights in the first place. Lawrence Gordon has been identified as one potential party but it looks like he will be joined by a less publicized defendant.
The 2006 Warner Brothers agreement to acquire the Watchmen film rights actually identifies two different parties as “seller”: Golar Inc. (Gordon’s company) and LEI Development Projects. Who in the world is LEI? Copyright records show that Largo Entertainment (Larry Gordon’s company prior to Golar) assigned rights to dozens of screenplays, including one or more Watchmen scripts, to LEI in 2002. Warner Brothers acquired rights to Watchmen screenplays by Sam Hamm, Charles McKeown and Gary Goldman in the 2006 agreement. So all three scripts were probably part of the batch acquired (bought) by LEI in 2002. There is no indication of how much money, if any, was exchanged between LEI and Golar.
Confused yet? It gets even more confusing. Warner Brothers paid exactly $1 dollar in cash (read the agreement below) for the option to make a movie based on the Watchmen materials. In addition to that single dollar, Warner Brothers agreed to pay LEI, not Golar, an amount equal to 5% of 100% of the “defined proceeds” of any movies derived from the Watchmen materials. Apparently, a separate producer agreement with Warner Brothers gave Lawrence Gordon his own cut of the proceeds.
So, at least on paper, Golar received no money from the deal for the Watchmen materials but accepted liability under the agreement’s indemnification clause. This clause states (in part) that:
Seller [Golar and LEI Development Projects] shall indemnify and otherwise hold WBP (its successors, assigns, licensees, agents and representatives) harmless from and against any and all claims, demands, liability or expense (including reasonable attorney’s fees) arising out of or resulting from any breach of its representations, warranties and agreements hereunder.
Hopefully, LEI enjoyed spending their dollar.