Distributor sues producer of ‘3:10 to Yuma’ over DVD deal

Home video distributor Image Entertainment on Monday accused Relativity Media, a leading independent film production company, of reneging on a 2006 agreement to provide Image with dozens of films for the DVD market.

Relativity has not provided Chatsworth-based Image with a single title for home distribution, even though the agreement called for the production company to provide three films in 2007 and as many as 20 a year in 2008 and beyond, according to a complaint filed Monday by Image in Los Angeles County Superior Court.

Attorney Martin D. Singer, who represents West Hollywood-based Relativity, called the case “ridiculous and without merit,” saying the companies resolved the issue in 2007 in a binding settlement.

“Even prior to the settlement, our initial agreement with Image did not obligate us to give them the films they are claiming,” Singer said.

“We did have a dispute about a year ago where they falsely claimed they felt we had an obligation to deliver certain films, which was quickly resolved.”

Image denies that any such settlement was reached.

Relativity produced or co-produced “3:10 to Yuma” in 2007 and “The Bank Job” this year, as well as the upcoming release “The Forbidden Kingdom.” None has been provided to Image for home distribution.

The DVD of “3:10 to Yuma” was released by Lions Gate Entertainment, as will be DVDs of the other two films, according to the lawsuit.

Relativity was to receive shares of Image stock for every film it provided. Although there are no indications that any shares or money ultimately changed hands, Image contends that it has been deprived of millions of dollars of potential revenue because of a lack of films for distribution.

The complaint alleges that Relativity never intended to fulfill its part of the deal. Instead, the complaint says, it hoped to convert the agreement into a long-term distribution deal with Lions Gate, which was then trying to take over Image.

The deal also called for Relativity to receive shares of Image stock worth millions of dollars if the takeover was successful, the complaint says. Lions Gate eventually abandoned the takeover.

Relativity is headed by Ryan Kavanaugh, who has been a prominent promoter of an investment model through which hedge funds have backed slates of Hollywood movies. A Feb. 16 story in The Times noted that the investment model appeared to have produced losses for some of these hedge funds.

According to the lawsuit, Kavanaugh initially approached Image Chief Executive Martin Greenwald in 2006 with the distribution proposal. The deal was reached Aug. 11, 2006. In August 2007, Image demanded a written explanation for Relativity’s failure to provide it with the distribution rights to the three films. Relativity never provided the explanation, the lawsuit said.

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