Investigations Against Netanyahu at the Core of $50 Million Hollywood Lawsuit

A U.S.-based group of film investors is suing Israeli-born Hollywood producer Arnon Milchan for $50 million, Variety reported on Friday. The group, which includes Ron Burkle, Steve Bing, and Brett Ratner, is accusing Mr. Milchan and his distribution company, Regency Enterprises, of fraud, blaming them for the box office failure of Warren Beatty’s latest film “Rules Don’t Apply,” which premiered in November 2016.

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The investors are claiming that Mr. Milchan was distracted by an ongoing legal investigation against him in Israel. Dubbed Case 1000, the investigation alleges that Mr. Milchan has given Israeli Prime Minister Benjamin Netanyahu and his wife Sara gifts amounting to nearly $300,000, in return for help with smoothing over regulatory hurdles holding up personal and financial matters.

The lawsuit filed by the investors earlier this month is a countersuit following a $19 million lawsuit filed by Mr. Milchan against Mr. Beatty and the investors in December. In his lawsuit, Mr. Milchan claims that the film was a flop with test audiences and yet the investors insisted on expanding its release against his professional opinion and guaranteed to cover any losses incurred by Mr. Milchin as a result.

According to the countersuit, Mr. Milchan’s preoccupation caused him to pass over the distribution duties of the film to his son Yariv, who lacked the proper knowledge and experience. The lawsuit alleges that, under Mr. Milchan’s instructions, the son repeatedly avoided meeting with Mr. Beatty to discuss the film, and that Mr. Milchan slept throughout the only screening of the film in which he attended. The investors also claimed that the film was well received by critics and would have gained reasonable box office success, had Mr. Milchan and Regency have done their job, and contended that Mr. Milchan’s conduct voids the guarantees they made for repaying the distribution costs.  

A period romantic drama, the film, which was the first film directed by Mr. Beatty after a 14-year break, was a major flop at the box office. Costing nearly $55 million in production and distribution costs, the film racked up just $3.9 million.