International Film Investors v. Arbitration Tribunal of Directors Guild

International Film Investors (IFI) petitioned the Superior Court of Los Angeles County for a writ of prohibition seeking to prevent the commencement of arbitration proceedings.

IFI is a limited partnership whose primary business is development of motion picture investment opportunities including arrangement of financing, oversight of film production and distribution of rights. Friedman/Meyer Productions, Ltd. (F/M), one of the real parties, is a New York corporation.

In March 1980, F/M and IFI entered into a written agreement for the production of a movie based on the comic strip “Brenda Starr.” IFI was primarily responsible for securing financing and exploiting various rights while F/M was primarily responsible for actual production. At the time of the negotiations the principals of F/M were being investigated by a federal grand jury for tax fraud. Because IFI was concerned that an indictment would jeopardize financing or production, the parties entered into an additional agreement providing that upon indictment and certain other conditions IFI had the right to remove F/M and take over production of the film.

F/M had entered into an employment agreement with David…