AMC recently agreed to pay $200 million to settle a lawsuit with former showrunner, Frank Darabont.
Popular television horror show, The Walking Dead, is getting ready to kick off its final season. At the same time, a long legal battle between former showrunner Frank Darabont and AMC is coming to a close. Earlier this week, AMC announced that it paid $200 million to Darabont. According to paperwork the studio filed with the SEC, AMC stated:
“The Settlement Agreement provides for a cash payment of $200 million (the ‘Settlement Payment’) to the plaintiffs and future revenue sharing related to certain future streaming exhibitions of The Walking Dead and Fear The Walking Dead…With regard to the Settlement Payment, the Company has taken a charge of approximately $143 million in the quarter ended June 30, 2021, in consideration for the extinguishment of Plaintiffs’ rights to any compensation in connection with The Walking Dead and any related programs and the dismissal of the actions with prejudice, which amount is net of approximately $57 million of ordinary course accrued participations…The Settlement Agreement also includes customary provisions included in such agreements, including providing for mutual releases, covenants not to sue, waivers, confidentiality, non-disparagement, and indemnification for third-party claims.”
As part of the settlement, AMC will buy Darabont and his agency, CAA, out of “most of their rights to the intellectual property from the franchise.” But what happened? Why was the suit filed?
For those who don’t know, this particular legal battle has been going on for years. The lawsuit was filed back in 2013 and stemmed from claims Darabont made that AMC had “used shady accounting to short him on profits.” During the litigation process, the legal system appeared to be favoring Darabont and his agency, CAA. AMC got so nervous about the direction of the proceedings that it fired its lawyers who were originally working on the case and hired Gibson Dunn instead. Dunn and his team were “able to stave off a summary judgment loss and was prepared to make the trial all about how Darabont had been represented in the original contract negotiation by sophisticated lawyers and agents and was merely trying to use litigation to renegotiate a better deal.” As a result, an appeals court dismissed parts of Darabont’s case in April, though the “key issue of interpreting the contract was set to go to a jury in April 2022.”
However, the COVID-19 pandemic has thrown a wrench in things and slowed down the litigation process so it is not known whether that April 2022 court date would have been pushed back. Fortunately, the parties involved were able to reach an agreement before then.