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How ex spouses can still reap benefits from movie sequesl

by | Oct 28, 2017 | Divorce, Firm News

Hollywood certainly loves iteration. But let it be said that there can never be too much of a good thing. When sequels and multiple marriages mix, things get complicated. Indeed, it’s a recipe for legal action.Take Blade Runner as an example. The original 1982 sci-fi classic about an ex-cop hunting “replicants” was co-executive produced by Bud Yorkin, best known for TV shows like All in the Family and Sanford and Son. When Blade Runner came out, he was married to Peg Yorkin. The two got divorced in 1986, and as is customary, they divided assets. A 50 percent share of Bud’s interest in Blade Runner was part of the divorce decree.So what about Blade Runner 2049, the critically acclaimed sequel now out in theaters? Is Peg getting anything? Turns out, she probably will be thanks to an arbitration award, which has now landed in open court.In 1989, Bud married a second woman — Cynthia Yorkin. In the 1990s, Bud and Cynthia became interested in selling derivative rights in Blade Runner so that a sequel could be made. To accommodate such efforts, Peg agreed to reduce her own interest in Blade Runner Derivative Holdings, Llc., from 25 percent to 15 percent. But there was a condition. If a sequel to Blade Runner came, and if a producing services agreement was entered into for this sequel by a member of Bud’s immediate family, she’d be entitled to 25 percent of any contingent compensation payable under that deal.Peg’s lawyer at the time was careful. According to court papers, to protect against a deal for a Blade Runner sequel being structured in a way that denied her benefits — i.e., cash that would have otherwise been for the purchase of derivative rights diverted to a producer’s fee — Bud and Peg agreed to a different compensation structure in the event of a producer services agreement that wasn’t “bona fide” and “customary.”That ended up coming up once Alcon Entertainment paid $11 million to purchase the derivative rights to Blade Runner and then went about getting Blade Runner 2049 made.Bud Yorkin, who died at the age of 89 in 2015, and Cynthia Yorkin (also known as Cynthia Sikes) both became producers on Blade Runner 2049. They got fixed compensation, not contingent participation, so the question arose whether their arrangements amounted to a non-customary, disguised rights payment.Last July, a panel of three arbitrators at the American Arbitration Association addressed Cynthia’s compensation.

“Claimant [Peg] established that Cynthia had no prior meaningful experience as a producer and her services prior to Bud’s death were primarily as a spokesperson for Bud,” wrote the arbitrators. “The evidence further demonstrates that Alcon was very eager to acquire this project and was not concerned with whether its money was paid for rights or services. Moreover, the Producer Agreement was clearly not customary in providing all fees would be paid even in the event of the death or disability of both Bud and Cynthia. Additionally, it would not be customary for a Producer Agreement providing for a $2 million producer fee to have no provision for back-end compensation. Furthermore, the sequel fee provision was not customary, providing for fixed compensation of $2 million for any remakes, prequels, or sequels to Blade Runner 2049 even if [Bud Yorkin Productions] was not engaged to render any producing services.”

The arbitration award added, “Although Cynthia worked on the current sequel through post-production and her services may well have had value, this does not justify the substantial compensation in the Producer Agreement or the other non-customary terms.”

As a result, a Trust established by Peg was awarded $300,000 in compensatory damages for breach of contract plus an economic interest in any subsequent sequel to Blade Runner 2049. Sheldon Eisenberg, the Drinker Biddle attorney representing Peg, last week filed a petition to confirm the award in Los Angeles Superior Court.