Film producer George Litto has sued French insurer AXA Re for revoking two insurance contracts that would help provide funding for five motion pictures.
According to the complaint filed with the American Arbitration Association in Los Angeles, George Litto Pictures (GLP) obtained two lines of revolving credit from Chase Manhattan Bank worth more than $100 million. The issuance of each loan was contingent on the existence of supporting insurance in which AXA Re assumed to protect Chase in the event of any shortfall.
After the first film, “The Crew”, starring Richard Dreyfuss and Burt Reynolds, was covered by the shortfall insurance AXA Re revoked its contract, resulting in Chase terminating its financing for the five-picture deal.
Under the terms of the agreement, all disputes or claims relating to the contract are to be decided in arbitration proceedings. The suit, which also states that AXA Re acted in bad faith, asserts that, among other things, AXA Re arbitrarily and maliciously withdrew its collateral without any prior consultation with GLP, and that this act severely damaged the company’s ability to continue funding and producing motion pictures under its original plan.
The suit seeks damages for economic loss, consequential economic damages, damage to reputation and emotional distress as well as punitive damages.
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