Ruling for Paramount Upheld in ‘No Country for Old Men’ Case

Marathon Funding had claimed that the studio diverted part of its profits to pay a bonus to "No Country for Old Men" star Tommy Lee Jones

An appeals court on Monday affirmed  a tentative ruling against Morgan Stanley-backed Marathon Funding, which had claimed that Paramount improperly deducted a $17.5 million box office bonus to Tommy Lee Jones from its profit participation.

The ruling, handed down by the state's second appellate court in Los Angeles, upheld a December 2011 decision by L.A. Superior Court Judge Mark Mooney that Paramount  had not cheated Marathon out of profits from “No Country for Old Men.” Marathon had claimed  some of the money instead had gone to make a hefty payment to Jones.

Paramount, which distributed the 2007 Best Picture Oscar winner through its now-defunct Vantage label, was forced to pay Jones a $17.5 million box-office bonus when an arbitrator found the studio's lawyers had made an error when they drafted Jones' deal to star in the movie. The lawyers eventually paid a $2.6 million settlement to the studio for the error.

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Marathon Funding, which had a multipicture financing  pact with Paramount that included “No Country,” claimed that its deal with Vantage entitled it to 25 percent of "net distribution revenue" from the movie. Marathon in April 2010 filed a breach of fiduciary duty lawsuit claiming the studio shouldn't be able to deduct a $2.45 million charge from the pool of money it must pay to Marathon for backing the movie.

Judge Mooney on Dec. 22, 2011, issued a tentative ruling in favor of the studio. He ruled that Marathon's charge was not inappropriate because Paramount's relationship with Marathon was not a joint venture.

As part of the appeal ruling, Paramount' was awarded attorney's fees as well. The studio was represented by Kendall Brill & Kleiger, Richard B. Kendall and Nicholas F. Daum. Marathon was repped by Hillel Chodos.

Pamela Chelin contributed to this report.