Sorry this is late... and yet more Watchmen... enough to choke on... but I finally got a look at the legal papers around the Christmas Eve finding by Judge Gary Allen Feess and it does speak specifically to a couple of the rumors that are being floated out there.
First, it states that the judge has found that Warners' primary argument consists of the notion that Fox never had any direct ownership or control to this material, therefore it didn't have the right to execute a turnaround agreement or to expect any compensation for the agreement it had.
This is one of the silliest arguments ever made and suggests complete culpability on the part of the studio... willfulness, really (as noted in the judge's August offering). Apparently, they have represented that they knew... and they decided Fox had no standing... at all... period.
Second, the judge finds that WB didn't even enter into an agreement with Larry Gordon until AFTER they had been notified of Fox's position on this. So this idea that WB innocently wandered into this situation and that Fox lay in wait for poor, innocent WB to invest heavlily in production before backdooring a claim is 100% false... if you believe the judge on the facts... which I think we have to.
Third, Warners' other argument - as though if their frst one was valid they would need a second one - is that, somehow, because Fox negotiated a turnaround and a quitclaim with clear rules agreed to by Largo, Gordon, and Fox, which did not include a clause forcing Largo to make the movie anyway (read that again, if you can do it without laughing), Fox gave up any claims to distribution rights they held.
Ahhhhh... ha.
So... repeating... the basic claim by WB - according to the judge, as a statement of fact - is NOT what their "it's not fair" publicity blitz has been about, but rather a claim that Fox never had rights, never had any ongoing interest, and should simply be told to go away, not even to get back the monies they spent on development. And the fact that after they gave up their interest in producing a movie, but had a deal to return monies against development in exchange for those rights and distribution rights, the deal itself - a failrly boiler plate thing - made all of their rights invalid because the deal not to make the movie led to not making the movie.
It's time for the geeks to start getting angry about being played by Warners on this one. I can't imagine that anyone really believes that either of Warners' central arguments hold any water whatsoever. The only exotic element of this whole situation was the Largo quitclaim deal and how it fit with the turnaround deal... and even that was pretty clear. Larry Gordon's lawyer is now claiming that he would never has made the turnaround deal if he knew about the history between Largo and Fox... but if that's true, he is the second worst legal professional in this situation.
Worst of all... if Warners' had just paid the million or the $1.5 million or whatever Fox would have taken, this would have been over before it began. Instead, they rolled the dice and this is going to cost not less than 50 times that much. Look for WB to sue Gordon for their losses by summer. And watch Gordon escape that one by noting what the judge has noted... that they knew exactly what the paperwork said and made a terrible legal call that was not his call to make, however he represented the situation verbally or even in a contract indemnifying Warners.
And what of Paramount? Good question. Right now, they are just an "et al" in the suit and the question of "distribution" has not been specified as domestic or international or both. (And isn't the reason they ended up splitting with WB because they had so much money against the versions of the movie they never made... not unlike Ben Button? I could be wrong on this... there is probably some very specific story that I don't know and that one of you will offer... but "money against" films unmade... basic.)
Paramount needs the cash and it would be less than shocking if they ended up making some kind of deal to get their money out, take some profit down the road, and to, essentially, sell Fox the international distirbution rights with, esentially, Warners' money. The only problem is that there is no time for Fox to ramp up worldwide distribution in time for the March release. So could Paramount get paid a distribution fee and its costs and some backend and give the money rights to Fox. Sure. Why not? This could end up being a viable answer, as Paramount made a very wise investment, but can't really afford to see the money get tied up in multi-player court cases and delayed by a year or more.
But really... it's completely conjecture at this point.
Some of the paperwork...
Read the complete post at http://www.mcnblogs.com/thehotblog/archives/2008/12/watchman_legal.html