Not in bankruptcy, no, but, being sued in bankruptcy court.
How can you be sued in bankruptcy court?
One way, is to try to get money from a person, or company, that filed bankruptcy. Or, in this case, sue someone who has a right to be reimbursed by the company that is in bankruptcy.
“Robin Hood”, the Costner version, did not go bankrupt; it was an international hit, over $400 million, all tolled. Hollywood bookkeeping being what it is, although Mr. Costner did receive his salary and some extra dollars:
“The deal promised Costner “significant” base compensation as well as certain contingent compensation; the lawsuit says he was paid that base amount as well as additional contingent compensation.”
In the law biz, contracts come down to the words. Costner’s suit in California state court claimed he was entitled to “substantial” compensation.
Hmmm. I think his lawyers think substantial is more than additional. So, Costner sued in California, state court, not bankruptcy court.
So how does a California state court suit, against the producer, Morgan Creek, get to a New York bankruptcy court?
Well, things get sliced and diced and outsourced and, whatever, it turns out that Morgan Creek had Inverness handle foreign distribution rights. Seems foreigners like Robin Hood too, hey, why not? He was a foreigner himself. That is, not American. Far as I know. If he even existed.
But I digress.
Of course, everyone involved has plenty of lawyers, so indemnification clauses abound. Morgan Creek had such clauses in its contract with Inverness, so, if Morgan Creek loses, and has to pay Costner, it has the right to get reimbursed, or, indemnified, by Inverness.
Ah! We reach the end of the trail. No buffalo there, but Inverness is in Chapter 11 bankruptcy court in New York. And, Morgan Creek filed suit, in that bankruptcy court, stating that Costner’s claims have to be stayed by the Inverness bankruptcy, cause, if Morgan Creek loses, Inverness loses, and that additional debt would mess up its plans.
Leave it to the lawyers to drag Costner all the way across the country to throw a roadblock in his suit. Well, that is the job of Morgan Creek’s lawyers, zealous advocacy and all. But, seems to me, they think Costner has a good claim or they would not be pulling this stunt.
(image credit: IMDB site)