Greetings HHSE Friends & Followers - Hannover House achieved a
major legal victory on Wednesday with the ruling in HHSE's favor by the court in the
"AMITYVILLE ASYLUM" case. Bottom line is that the producer's
claims for "damages" in this contract law dispute were
supported with (quote from the presiding judge) "... no
credible or reasonable evidence" - and the ruling was made in
favor of Hannover House. The judge further stated that the accounting
reports from Hannover House appear to be "very thorough" and
with "third-party verification" of units sold, units
returned, monies paid and amounts due.
Although the producers of "AMITYVILLE ASYLUM" were seeking a total of $300,000, the court ruled that all they were entitled to was $12,651 - which is the net balance due on actual, earned royalties.
HHSE had previously offered to settle for a far greater amount
than the actual royalties, to avoid the nuisance and distraction of ongoing
litigation. But the Amityville producers rejected this lucrative offer in favor
of hoping to persuade the court that they had somehow been mistreated. The
principal evidence that they submitted to support their claim of
"damages" was a statement of "projected earnings"
from Alchemy Entertainment, Inc., on four totally different movies. But Alchemy
filed bankruptcy and ultimately never paid anything to the Amityville producers
- thus rendering the Alchemy valuation forecasts as unreliable.
During testimony received via SKYPE from Wales, Amityville
principal Robert Graham admitted under oath that the film was intentionally
titled "Amityville Asylum" in hopes of confusing
consumers into thinking the film was part of the successful AMITYVILLE HORROR
film franchise. This sworn testimony supported Hannover's claim that many
retailers refused to carry the title out of their concern for potentially
confusing and upsetting their customers. This specific admission under
testimony could be used in a trademark claim, should Emmett-Furla Films or
MGM (co-owners of the true "Amityville Horror" franchise),
decide that this willful infringement merits legal action. But that's not a
HHSE matter of concern.
The biggest victory is the court's ruling that the HHSE statements
represented an accurate and verifiable history of sales activities for the
titles... and how today's victorious result may temper the enthusiasm for
future, baseless claims from any other producer of "projected losses"
or damages. The HHSE producer reports were accurate to the penny - and fully
conformed to the independent third-party back-up. For a producer to claim
that they are owed MORE than the HHSE-generated producer statements, is
fundamentally a false assumption and one that will never win over basic math.
HHSE provided a fully accurate statement to
"AMITYVILLE." We tendered the first of four, mutually-agreed
installment payments (three payments at $5,000, plus one of $2,751),
but before the second payment was released, the Amityville producers filed a
lawsuit. Ultimately, three years later, they got exactly what the title was due,
period. No punitive damages, speculative or projected earnings...none of that
complete nonsense.
In 24-years of operations, Hannover House has been named (often
as one of multiple-named parties) in NINE (9) lawsuits from program
suppliers, representing a total of 17 films. This represents an extremely
low percentage of unhappy producers (about 3.7%) out of our
451-title film library. As a point of comparison, the industry's two
largest indie studios (LIONSGATE and WEINSTEIN COMPANY) are
reported to have producer lawsuits in 10% and 25% (respectively) of
all films handled. This does not mean that any of the companies are doing
business in a dishonorable way. It just means that producers almost ALWAYS have
very high expectations for how they THINK their movies should perform... and
the distributor usually gets the blame, even when a film gets horrible reviews
from film critics (how is that the distributor's fault?).
As HHSE grows into the evolving media market for independent films
- our new business model of handling HIGHER PROFILE titles and ORIGINAL
PRODUCTIONS is expected to dramatically reduce or eliminate future producer
lawsuits. If we are no longer handling micro-budgeted films from first-time
producers, we won't need to waste time in a courtroom explaining how math or
consignment video sales work. We are NOW dealing with a higher class of program
suppliers, and are intimately involved in the production processes of most of
these films - to create better quality titles with the greatest commercial
value. It's the beginning of an exciting era for HHSE, and corresponds with the
end of the micro-budget, direct-to-video market. Consumers demand better
quality films, with original stories, quality production values, known stars
and legitimate theatrical release... that's our 2017 - 2018 and beyond business
model, so stay tuned for more!
... last but not least, speaking of EMMETT-FURLA films, here's an
oldie-but-goodie photo of HHSE C.E.O. Eric Parkinson with RANDALL EMMETT and
CURTIS 50-CENT JACKSON at the Sundance Film Festival. Parkinson has
worked with George Furla and Randall Emmett on five prior productions,
including "FUTURE SHOCK" (directed by Parkinson) and
"GRIZZLY MOUNTAIN" (written and Produced by
Parkinson). "FUTURE SHOCK" is an HHSE title for
worldwide rights; "GRIZZLY MOUNTAIN" is a MGM-UA title.
