Goldman Sachs (GS) and its high-flying profits continue to provoke anger among lawmakers and Americans squeezed by the Great Recession, but now the investment bank giant has a new battle to fight: a multi-million dollar lawsuit filed by one of Hollywood's most powerful producers.
According to the Hollywood Reporter, Joel Silver claims in a filing with the Los Angeles Superior Court that Goldman Sachs failed to pay $30 million owed to him "from a series of financial arrangements related to films produced by his Dark Castle production company."
These arrangements evidently date back to 2007, when the economy was in much better shape and Goldman was looking to get into the film business in a big way. Turning to Silver, whose voluminous producing credits include the first two Die Hard movies and all the Lethal Weapon movies, seemed obvious: His movies collectively made billions of dollars and for Goldman, it translated into a sure bet.
A Complicated Deal to Break into Show Biz
Of course, it was a little more complicated than that. Goldman was actually looking to buy a part of the Canadian-based production company Alliance, and the investment bank wanted to use its Alliance connections to work with Silver, according to the Hollywood Reporter. But to make this work, Goldman needed another company to put up some money, which is where the Societe Generale de Financement du Quebec (SGF), a frequent financial partner of Dark Castle, came in.
"Goldman promised that once SGF helped finance an Alliance deal, Goldman would then finalize a deal with Silver and pay him what was initially agreed to as $35 million," said Silver in the complaint. Then the price went down to $30 million, with a written contract that if the deal fell through, Silver would get a $2 million finder's fee in quarterly installments, with the last one due by February 2009. None of the money materialized.
Silver alleges that Goldman Sachs and fellow defendants Alliance and Momentum Pictures US "have repudiated and breached their contractual obligations to pay the Silver Parties at least $30 million, made fraudulent misrepresentations to benefit themselves by over $100 million, and refused to pay substantial amounts due for the valuable services of Silver." All this as the company was able to "make profits in the billions and to pay its own executives bonuses in the billions."
Film Producer Joel Silver Sues Goldman Sachs for $30 Million