Lawsuit Threatens Hobbit Movies

From Bloomberg:

J.R.R. Tolkien sold movie rights to his “Lord of the Rings” novels 40 years ago for 7.5 percent of future receipts. Three films and $6 billion later, his heirs say they haven’t seen a dime from Time Warner Inc.

The accounting methods used by New Line Cinema, the Time Warner unit that made the movies, will face a jury’s scrutiny in October, when the heirs’ lawsuit against the New York-based media company is set for trial in Los Angeles Superior Court.

The case, if not settled by then, may provide a window into accounting practices that let Time Warner deny proceeds of the Oscar-winning films to Tolkien’s heirs. The litigation also threatens to derail two “The Hobbit” films that, if their predecessors are a guide, could generate $4 billion in sales.

Tolkien’s family and a British charity they head, the Tolkien Trust, seek more than $220 million in compensation, according to Bonnie Eskenazi, an attorney with Greenberg Glusker, the Los Angeles firm representing the heirs. * * *

The Tolkiens also want the option to terminate further rights to the author’s work, as the original contract lets them do in the event of a breach, according to the complaint. News Corp.’s HarperCollins Publishers, which holds Tolkien’s publishing rights, is also a plaintiff. * * *