Mancuso Sues Paramount Over Studio Shakeup : Entertainment: He says he was ‘abruptly fired’ after challenging changes in the company’s command structure.

Frank G. Mancuso has filed a lawsuit alleging that Paramount Communications Inc. “abruptly fired” him as head of its movie and television studio despite protective provisions in his written employment agreement.

The suit demands more than $45 million in damages. It also promises further disruption at Paramount, which was rocked by Mancuso’s sudden departure Wednesday, just two days after movie producer Stanley Jaffe was named president and chief operating officer of the New York-based entertainment and publishing giant.

Paramount spokesman Nicholas Ashooh said the company will defend itself against the claims, which have “absolutely no basis in fact.”

According to the suit filed Thursday, Jaffe’s appointment last Monday violated contractual provisions that required Mancuso, as chairman of Paramount Pictures, to report only to Paramount Communications Chairman Martin S. Davis.

The eight-page complaint, filed in the Santa Monica Division of Los Angeles Superior Court, said Mancuso told Davis that he expected the company to honor the contractual reporting arrangement provisions and that he did not intend to resign.

Paramount then sent Mancuso’s attorneys at Irell & Manella a faxed notice Wednesday that the company was terminating his employment for “cause,” according to the complaint.

Privately, several people at the Los Angeles-based film studio say Davis never intended to fire Mancuso and believed that he would work with Jaffe, who had co-produced films such as “Fatal Attraction” and “The Accused” as an independent producer under contract to the studio.

According to those people, however, Davis did hope to knock down what he saw as a growing wall between Mancuso, as studio chief, and the corporate headquarters in New York.

“The message was to be that (this) is one company,” one Paramount executive said of Jaffe’s appointment to a role that would clearly have given him strong authority over both the film division and the Simon & Schuster book operation in New York.

Mancuso, in his lawsuit, charged that Davis “secretly entered into negotiations with Jaffe and hid these negotiations” from the Paramount Pictures chief. Davis then personally told Mancuso, according to the suit, that Mancuso would report to Jaffe--an arrangement that Mancuso said violated a five-year employment agreement that was set to expire in 1994.

According to several individuals, Mancuso had been aware of the plan to fill the newly created president’s post for some time but did not know in advance of the Jaffe appointment.

In the lawsuit, Mancuso said Davis or other Paramount executives Monday conducted a “campaign” to plant media stories that Mancuso’s authority had been diminished, in an attempt to win his acquiescence to Jaffe’s hiring or force him to resign. In an interview published Tuesday in The Times, Davis said he regarded Jaffe’s appointment as an “enhancement” of his divisional heads’ status.

Richard E. Snyder, chairman of Paramount’s Simon & Schuster publishing unit, did not return a call regarding published speculation that he was also unhappy with the Jaffe appointment. But Ashooh said Snyder had assured the company of his intention to stay in place.

Ashooh and others have said that Paramount intends to conduct a rapid search to fill Mancuso’s job but hasn’t fixed on any likely successor. Jaffe has taken charge of the studio, pending a new appointment.

At a meeting Wednesday on the Paramount lot, Jaffe praised Mancuso’s accomplishments during 30 years with the studio and told about 300 staff members that anyone who denigrated the former chairman would be fired.

Jaffe noted that morale had been low for a year, as a number of films came up short at the box office and some film executives were replaced. But he urged the staff to remain with Paramount despite Mancuso’s departure and pointed out that--unlike MCA, which was purchased by Matsushita, or Columbia, which was bought by Sony--Paramount was more interested in acquiring than being acquired by another corporation.

In a private meeting, according to one studio source, Jaffe advised film production chief David Kirkpatrick to soften his dealings with agents and producers.