P.E.A. films, the successor in rights to an Italian company that years ago had "The Good, the Bad, and the Ugly" and other seminal movies in its owned catalog, filed a federal lawsuit against Metro-Goldwyn-Mayer in 2014. That litigation alleged that MGM was not adequately compensating it under an agreement between the parties pursuant to which MGM distributed several of P.E.A.'s films, including the above Clint Eastwood classic.
The judge in that matter tossed most of P.E.A.'s case, with that company ultimately deciding to drop the litigation.
The matter spawned another federal suit, though, which P.E.A. filed just last week. The new complaint centrally relies upon evidence from the earlier trial that P.E.A. states conclusively shows MGM to have acted in bad faith for many years by underpaying P.E.A. The plaintiff contends that a contract that surfaced in the earlier trial provides grounds for relief based on MGM's "deception and false accounting perpetrated over decades."
The crux of P.E.A.'s complaint is as follows. The company and MGM inked a distribution agreement stipulating that MGM could keep 15 percent of all fees collected from third-party distributors. Years ago, though, MGM executed an agreement with Fox International Home Video that P.E.A. states conclusively establishes Fox as a sub-distributor of P.E.A.'s films. Pursuant to that pact, P.E.A. says that MGM has been collecting 50 percent of all distribution fees.
Thus, states P.E.A., it is being shafted by MGM to the tune of 35 percent of all distribution profits, under the long-term guise that Fox has only been a servicing company, not a film distributor.
P.E.A. is asking the court to rescind its agreement with MGM and grant it more than $5 million that it states has been wrongfully retained by MGM.
Unsurprisingly, MGM counters that P.E.A.'s suit and demands are without legal merit.