Split of Hollywood couple unfolds like a horror film

Even by Hollywood standards, the divorce between veteran ICM talent agent Risa Shapiro and horror film producer Oren Koules has been nasty. In more than two years of legal skirmishes, the power couple clashed over allegedly secret multimillion-dollar home deals, a money-losing minor league hockey team and, most pointedly, the landslide of money generated by the “Saw” movie franchise, according to court documents.

The divorce litigation, filling nearly three volumes in Los Angeles Superior Court, offers an uncommon glimpse into the finances of a highly successful Hollywood couple -- and the consequences when the marriage falls apart. Because Koules and Shapiro enjoyed prominent positions atop the Hollywood food chain, their separation started to reveal some of show business’ most guarded secrets: how much a blockbuster movie generates in producer profits, how richly compensated talent agents are, and how lucrative movie favors can be.

At the center of the feud was “Saw.” The court records assert that the first two “Saw” movies, released in 2004 and 2005, generated between $6 million and $7 million in early profits for Koules.

Around the same time “Saw” was bringing her husband a financial windfall, Shapiro, an ICM senior vice president who helped discover Julia Roberts and represents Jennifer Connelly and David Duchovny, collected deferred ICM compensation worth more than $582,000 and cashed in ICM stock and stock options of more than $258,000. She also earned an annual salary that recently exceeded $1.2 million, court records and a Koules declaration show. The bachelor pad Koules bought after the separation? A cool $6.25 million.

Facing the prospect of a public trial early next year, Koules and Shapiro recently settled their dispute, an attorney for Shapiro said last week. Terms of the settlement were confidential. But based on public records, child custody, alimony and child support were not issues in the case -- money was.

After more than 10 years of marriage and a son, who is now 12, Koules and Shapiro separated on Jan. 20, 2005. Soon thereafter, a divorce petition was filed, citing irreconcilable differences, the standard grounds in a California “no-fault” divorce. But the gloves came off almost immediately.

Shapiro argued that Koules ran the family finances in secret. In May 2005, Shapiro filed an affidavit saying Koules had bought two homes in 2004 without her knowledge -- a $264,000 house for his sister in Buffalo Grove, Ill., and a $3.3-million property on Miradero Road in Beverly Hills.

Koules said the transactions were simply part of his role in running the family finances, but Shapiro claimed Koules not only was using community property hidden in a trust to buy the Miradero residence but also was using some of the couple’s joint capital to purchase for himself a $6.25-million manse on Clinton Place in Beverly Hills after they broke up. (Shapiro remained in the family home on Coldwater Canyon.)

“I was unaware [he] had purchased a residence without my knowledge,” Shapiro said in a declaration. “He never discussed the purchase of a residence with me or told me we had purchased a residence.”

Shapiro asked the court to ensure that Koules wasn’t buying the Clinton estate with the couple’s pooled resources. Koules said he had made a $187,000 deposit on the home with his own post-separation income and worried that his ex-wife’s actions might kill the deal.

“Any and all attempts I have made to resolve the issues between [Shapiro] and myself have been in vain,” Koules said in one declaration. “I understand that [she] is hurt and angry with my decision to leave our marriage. Nevertheless, her unmerited actions regarding the purchase of a new residence where [my son] and I can live when he is in my custody is a reflection of her unwillingness to act reasonably.”

He added in a subsequent filing that her “litigious behavior is motivated not by reason, but by anger” and also that Shapiro “is searching for something which will demonstrate my untrustworthiness. She cannot find it.”

Ultimately, Koules turned to his Twisted Pictures partner and fellow “Saw” producer Mark Burg for assistance for a down payment. Burg agreed to loan Koules $2.6 million to help buy the Clinton Place house and took a potshot at his colleague’s ex-wife in the process. (Koules, Shapiro and Burg declined to comment on the case.)

“It does not surprise me that [she] is now trying to preclude Oren from purchasing the Clinton Place residence,” Burg wrote in his declaration to the court. “Based on my interactions with [her], I believe that she is an angry woman who dislikes not getting her way.”

Shapiro, for her part, kept vitriol out of her filings.

Another dispute focused on the couple’s minor league hockey team, the Helena Bighorns of the North American Hockey League. Koules, a longtime hockey fan and player who once toiled in the NHL’s Chicago Blackhawks’ farm system, had bought the team with Shapiro for $150,000 in 2001 (their son is an accomplished local player).

Shapiro said she was kept in the dark about their additional purchase of an ice arena, also in Helena, for nearly $1 million. One of her lawyers argued the two investments were losing more than $26,000 a month after their separation and asked that they be sold immediately.

“In essence, [Koules] wants [Shapiro] to pay for his hobby as long as possible and then have the court award the assets to him,” a lawyer for Shapiro wrote. An accountant working for Shapiro said Koules had intentionally kept the team and the arena’s true financial health from Shapiro.

“[Koules] informed me that he had deliberately misinformed [Shapiro] during their marriage about the financial condition of his hockey team investment,” David Blumenthal, an accountant retained by Shapiro, wrote. “He expressed to me concern that [Shapiro] was now going to find out that he had funded his hockey team’s operating losses of approximately $300,000 to $400,000 since his acquisition of the team.” The team has yet to be sold.

The most dramatic dispute, however, was over the “Saw” movies, and if the divorce had gone to trial, the franchise would have been at the center of it.

The low-budget films were financed by Twisted Pictures, the production company composed of Koules, Burg and Gregg Hoffman (who died in 2005). The three “Saw” horror films have been global blockbusters, selling more than $420 million in movie tickets worldwide and an enormous number of DVDs. Since Koules, Burg and Hoffman owned the movies, the three producers collected a huge cut of the film’s receipts. (As did Charlie Sheen, whose management firm is run by Koules and Burg. According to the court records, the actor was repaid for a $50,000 investment in the first film and then pocketed $431,000 in “Saw” profits. His spokesman declined to comment.)

Because the first film was created during her marriage to Koules, Shapiro believes she is entitled to some profits from all of the “Saw” movies; a third film was released in October 2006 and a fourth film is scheduled to be released in October 2007. In essence, she argued that “Saw” is like James Bond: The sequels are not separate, unique works but owe their provenance to an original idea formed during their marriage. (Shapiro says she invested $500,000 of her money in the first film, although those funds were apparently community property.)

Koules argued that only profits from the first film should be counted as community property, since the subsequent movies were made and released after their separation. He had offered to split his half of the “Saw II” proceeds with her while the matter was being litigated, with the remaining 50% in a frozen account. There was no accounting in the court records for the third and fourth films.

Herma Hill Kay, a family law professor at UC Berkeley’s law school, said Shapiro might have prevailed in her quest to collect money from the post-separation “Saw” sequels. “I think they have a very strong case,” she said. “At the very least, you should get an apportionment” of the profits.

Koules maintained that he deserved a share of Shapiro’s future earnings too. Koules essentially argued that Shapiro’s clients belonged to her, while Shapiro said they were ICM’s.

To bolster his position, Koules wanted to open ICM’s books, study the gross revenues generated by Shapiro’s clients, depose ICM Chairman Jeff Berg and top agent Ed Limato, and get a list of Shapiro’s clients over the span of their marriage.

Concerned that part of ICM’s confidential and proprietary business could become public, the agency sought to limit disclosures. A judge in the matter, worried that the release of ICM’s commission records would cause “chaos” to the agency and its clients alike, said that only edited financial records would be given to Koules for review.

The judge crafted a template for how earnings for Shapiro’s clients could be presented in a confidential format. Striking one of the only light moments in the case, the judge listed one of her client’s as “Fred Flintstone.”

In settling before trial, Shapiro and Koules avoided any more disclosures of their finances and the ultimate profitability of the hit horror franchise. But in the course of the messy litigation, they did echo in their breakup one of the tag lines of “Saw II”: “Oh yes

john.horn@latimes.com