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LOS ANGELES (CNS) - Two Entertainment One entities lost a round in court when a judge ruled that a lawsuit alleging the companies shortchanged Endemol Shine North America out of its share of profits for the Western television series "Hell on Wheels" can move forward.
The Los Angeles Superior Court complaint alleges that Entertainment One Television USA LLC kept for itself tens of millions of dollars in production tax subsidies and shared none of it with Endemol. On Tuesday, Los Angeles Superior Court Judge William Fahey overruled arguments by eOne USA and eOne Ltd attorneys that no wrongdoing occurred. He said the case can proceed for now.
In their court papers urging dismissal of the case, defense attorneys said Endemol is best known for producing reality television, but in this case it "tries its hand at a different genre: historical fiction." The same attorneys maintained that 100% of the tax credits were shared with Endemol.
The defense lawyers also maintained that eOne Ltd. "is not a party to either the term sheet or the distribution agreement, and is not even mentioned in those or any other agreements between the parties."
In a separate motion rescheduled from Tuesday to Oct. 19, eOne attorneys maintain eOne Ltd. is a Canadian company and that California courts lack personal jurisdiction because the entity has no "minimum contacts" in the state.
According to a sworn declaration by Emily Harris, eOne's vice president of global business and legal affairs, the company does not maintain any offices in California, own property or assets in the state nor does it maintain any business records there.
"Hell on Wheels" aired on the AMC network from 2011-16, dealt with the construction of the U.S. transcontinental railroad and was produced by eOne.
"Endemol also entrusted eOne with responsibility for distributing the series in certain territories and sharing the revenues it collected," the suit filed May 10 states. "An inspection of eOne's books reveals, however, that eOne took advantage of its role, kept for itself tens of millions of dollars in production tax subsidies and shortchanged Endemol in numerous ways."