On December 31, 2020, New York County Supreme Court Justice Joel M. Cohen delivered an opinion partially denying the motion of summary judgment that AMC Network Entertainment LLC sought in regard to Frank Darabont’s multimillion-dollar lawsuit for breach of contract.
Frank Darabont (“Darabont”), the creator of AMC’s hit series “The Walking Dead,” served as the showrunner from the show’s inception in 2010 to his firing in 2011. Darabont first sued AMC back in 2013 over a licensing fee dispute. While that case was pending, he filed another lawsuit in 2018, using AMC’s financial audit of the series to support additional causes of action. Both cases were later consolidated, with a jury trial presently scheduled for April 2021.
AMC originally agreed to pay Darabont a fixed rate as well as profit participation pay, which was based on a percentage of what AMC called Modified Adjusted Gross Receipts (MAGR). Darabont alleged that when AMC Studios licensed the series for broadcast to its corporate affiliate AMC Network, AMC used an artificially low license fee and a variety of shady accounting practices to cheat him out of his fair share of the “backend.” Darabont contends that this practice constituted a breach of his contract with AMC and shorted him more than $280 million.
In his decision on December 31, 2020, the Judge determined that whether AMC properly conformed to the MAGR framework for calculating Darabont’s profit participation was ultimately a question of fact better left to a jury to resolve. However, the Judge did grant AMC’s motion for summary judgment in regard to Darabont’s claim that he was entitled to a percentage of product-placement revenues derived from the series since such revenue sources were omitted from the MAGR definition.
The bulk of the claims asserted by Darabont now advance to the long-awaited trial, where AMC and Darabont will battle it out as to whether the former showrunner’s profit participation provisions were implemented in good faith.
Darabont is represented by Jerry D. Bernstein and Nicholas R. Tambone of Blank Rome LLP and Dale F. Kinsella, Chad R. Fitzgerald, and Aaron C. Liskin of Kinsella Weitzman Iser Kump LLP.
AMC Network and the other defendants are represented by Orin Snyder, Brian C. Ascher, Lee R. Crain, Scott A. Edelman, and Ilissa Sampling of Gibson, Dunn & Crutcher LLP.
The case is Frank Darabont et al. v. AMC Network Entertainment LLC et al., case number 650251/2018, in the Supreme Court of the State of New York, County of New York.
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