TSG Entertainment Sues Disney for Withholding Millions, Echoing Scarlett Johansson's Lawsuit

TSG Entertainment, financier for blockbuster hits like "Avatar 2" and "Deadpool," has sued The Walt Disney Company and its subsidiary, 20th Century Fox, alleging contractual breaches and withholding profits, reminiscent of Scarlett Johansson's recent lawsuit against the media giant.

In the lawsuit filed with the Los Angeles Superior Court on Tuesday, TSG Entertainment claimed that Walt Disney breached their contract. The movie financier included Disney's subsidiary, 20th Century Fox, in the suit, alleging that the studios committed several acts against the law, such as withholding profits and working out a deal to bolster its stock price and streaming platforms.

The suit stated that these offenses stripped TSG Entertainment of cash to put money into individual films on top of its efforts to sell off its stakes in other film projects. As per CNBC, TSG has been co-financing the cost of production and marketing of films in exchange for a share of the specific gross receipts after the movie's release.

It was revealed that TSG Entertainment helped fund about 140 movies produced by 20th Century Fox, a film outfit acquired by Disney in 2019. One of its biggest projects co-financed was "Avatar: The Way of Water." Since 2012, TSG said it has spent about $3.3 billion on the studio's film projects.

And as TSG Entertainment is a financier, its logo has been added to the opening credits of some movies, including "Gone Girl," "The Menu," and "The Greatest Showman." Then again, it should be getting a good share of the profits, not just the credits, and this is where the issue arose.

The company discovered "accounting tricks" and "rampant self-dealing" in the books. With this, it said it believed it was underpaid by Disney by at least $40 million. TSG made the alleged discovery after requesting an audit of three films it co-funded when it noticed a profit drop.

"At its root, it is a chilling example of how two Hollywood behemoths with a long and shameful history of Hollywood Accounting, Defendants Fox and Disney, have tried to use nearly every trick in the Hollywood Accounting playbook to deprive Plaintiff TSG," part of the lawsuit reads. "The financier who, in good faith, invested more than $3.3 billion with them - out of hundreds of millions of dollars."

Meanwhile, The Daily Mail reported that John Berlinski of Bird Marella law firm represents TSG Entertainment. It is the same group that represented Scarlet Johansson in a case that ended up with Disney settling the suit with the actress for an undisclosed amount which is believed to be about $40 million.

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