Matila Rohr takes Slovo to court

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MHR will lodge the suit in Moscow on July 17

MOSCOW — Russia’s top-grossing film of last year, helmer Fyodor Bondarchuk’s Afghan war drama “9th Company,” is facing a new battle: Finnish co-producer Matila Rohr Prods. is taking Russian production company Slovo to court, claiming it has violated the co-production contract.

MHR will lodge the suit in Moscow on July 17.

Pic, distribbed by Fox-aligned Gemini, has brought in approximately $27 million at the Russian B.O. since its September release.

MRP provided digital image processing and coordinated stunt scenes in return for exclusive rights to distribute the film in the Baltic and Nordic countries plus 10% of the film’s income in Russia from cinema distribution, DVD and video sales, and sales of TV rights. It says it has not received a cent.

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In fact, there may not be many profits just yet.

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According to MRP, the deal signed with Slovo in March 2003 was for a $3 million pic. That budget more than doubled to $6.25 million, with $3.7 million spent on P&A, according to Slovo producer Yelena Yatsura.

Says MRP: “Contrary to the agreement, Slovo did not inform its partners on how the budget overdraft would be financed. Changes in the schedule also resulted in additional costs in the digital image processing, which MRP paid out of its own funds.”

Half of B.O. income stays with theaters, while between 12%-18% is typically paid to distributors, which means the producers probably got back around $11 million. Strip out the film’s $10 million costs, and that leaves very little profit for the co-producers to share until ancillary revenues come in.

Yatsura counters that MRP’s services, including special effects and an exploding airplane stunt, were below par. “We could have done it better ourselves,” she said.

International distribution has also raised hackles.

MRP authorized a distributor for the pic in the Baltic countries, but found out that Slovo had sold the Baltic rights to Russian-owned company Sonatin, which released DVD and VHS copies of the film day and date with its theatrical premiere.

“The Estonian police are investigating the matter as a copyright violation and have taken legal action against both Slovo and Sonatin,” an MRP spokesman said. “After being contacted by the police, Slovo expressed regret over its mistake.”

Yatsura admitted the mistake, citing poor communication, and says her company cancelled that contract and repaid any fees.

MRP also claims Slovo licensed the film to a U.S. distributor of Russian origin without MRP’s consent, who started to sell the film internationally. “U.S. legal authorities are investigating the matter as a copyright violation,” MRP says.

Yatsura counters that the U.S. rights sold were only for a Russian-language version, but admitted that rights had been sold — via a sub-agent — to Poland, and that negotiations on international TV sales are ongoing.

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