There is also the important argument that all contracts for a % of revenue or profit immediately become meaningless if you allow this. Create any film in a number corporation then transfer the film only to a different corporation. The original shell corporation has all the liabilities but no assets to pay them. Too bad for the creators.
That is mergers and acquisitions 101. Look at any mining or chemical company that merges itself into a new entity without taking along its abandoned worksites in need of environmental reclamation.
The interesting part is Lucas's role in all of this. I want to see the purchase contracts. It might actually say in there that Lucas was supposed to buy out these rights and deliver the assets clean of obligations. If I were advising, I would say sue both Lucas and Disney and let them fight it out amongst themselves.
My understanding is that film companies already do a variation on this, where actors are hired by a shell company that is ""hired"" by the main company to produce the film. Thus, the company that hired the actors (and that they have a %-revenue share contract with) makes little to no profit.
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There is also the important argument that all contracts for a % of revenue or profit immediately become meaningless if you allow this. Create any film in a number corporation then transfer the film only to a different corporation. The original shell corporation has all the liabilities but no assets to pay them. Too bad for the creators.
That is mergers and acquisitions 101. Look at any mining or chemical company that merges itself into a new entity without taking along its abandoned worksites in need of environmental reclamation.
The interesting part is Lucas's role in all of this. I want to see the purchase contracts. It might actually say in there that Lucas was supposed to buy out these rights and deliver the assets clean of obligations. If I were advising, I would say sue both Lucas and Disney and let them fight it out amongst themselves.
My understanding is that film companies already do a variation on this, where actors are hired by a shell company that is ""hired"" by the main company to produce the film. Thus, the company that hired the actors (and that they have a %-revenue share contract with) makes little to no profit.
That's my understanding as well. That the fraud is so widespread with very few consequences, that it is also referred to as "Hollywood accounting"[0].
[0] https://en.wikipedia.org/wiki/Hollywood_accounting