Company Town : Too Many Ironies in the Fire at Sony

Hollywood ironies . . .

It was just two months ago that Sony Corp. acknowledged that it overpaid for its Hollywood operations by a couple of billion dollars. All told, the company took a whopping $2.7-billion write-off stemming from that and other problems at its Sony Pictures Entertainment unit, which includes the Columbia and TriStar studios.

Now Sony and its top U.S. official, Michael P. Schulhof, are quietly settling--for up to $25 million--a lawsuit that in effect alleged that they underpaid for Columbia Pictures.

The case stems from class-action lawsuits filed in 1989 on behalf of Columbia shareholders after Sony bought the studio for $3.4 billion. The lawsuits alleged that Sony officials misled investors in public statements about whether they were negotiating to buy Columbia, thus dampening the company’s stock price.

Details of the settlement, the subject of a court hearing next month, have been filed in U.S. District Court in New York. The papers say Sony continues to deny the allegations despite the settlement and believes that the lawsuit is without merit. Company officials declined to comment.

Now that Sony has settled allegations that it underpaid, it still faces a separate class-action suit filed last month alleging that it overpaid and didn’t inform investors.

No reversal of fortune here: On the eve of The Trial, one of the lawyers involved in the O.J. Simpson case has just negotiated a TV movie deal, albeit one that will undoubtedly pass muster with Superior Court Judge Lance A. Ito.

Alan Dershowitz, the Harvard Law School professor and celebrity lawyer who is serving as a consultant to the Simpson team, has just sold the rights to his new novel “The Advocate’s Devil” to TriStar Television.

One other Dershowitz book, “Reversal of Fortune,” about his role in getting murder defendant Claus von Bulow off, was a successful theatrical film that earned actor Jeremy Irons an Oscar.

The price is said to be $500,000 for Dershowitz and his movie producer son, Elon, who also helped produce “Reversal of Fortune.”

Negotiating the deal for Dershowitz was a team of United Talent Agency agents that included Mark Jacobson, Karen Russell, Jay Sures and Leslie Maskin.

Dershowitz’s novel is about a defense lawyer based in Cambridge whose client is a New York Knicks basketball star he suspects may be guilty of rape. One irony: Agent Russell, who helped negotiate the deal, is the daughter of former Boston Celtics superstar Bill Russell as well as a former student of Dershowitz at Harvard.

An auditor ran through it: A lot of people slave away as clerks in Hollywood hoping for a break one day that will get them in front of the camera or in other prestigious movie jobs.

Now a lot of people who are in front of the camera are becoming clerks--at least on paper--and the state’s largest workers’ compensation insurance firm isn’t happy.

State Compensation Insurance Fund is seeking $1.5 million in premiums it claims it is owed by Bon Bon Entertainment, a payroll services firm that arranged for workers’ compensation insurance on films such as Robert Redford’s “A River Runs Through It” and as “Pacific Heights” and “Weekend at Bernie’s II.”

The insurance company alleges that an audit turned up a batch of questionable activities, including classifying higher-risk jobs, such as stunt work, as clerical work because insurance premiums for clerks are much lower. The company added that there’s no evidence that Redford or his production company knew any of it was going on.

“Everyone knows that Hollywood is the land of make-believe. But artistic license notwithstanding, State Fund is having a tough time believing the story line on all the books,” company spokesman James Zelinski said.

Lawyers representing Bon Bon said the firm is inactive for now while it reorganizes financially, but they said the company denies the allegations.

Lower the volume: In a move executives hope will cool off rumors of a wholesale bloodletting at Warner Bros. Records, new company Chairman Danny Goldberg is expected to elevate a batch of insiders to key jobs in the next two to three weeks.

Officials at the label didn’t want to comment, but sources said Steven Baker, vice president of product management at Warner Bros. Records, will be named to the No. 2 job of president.

Jeff Gold, senior vice president of creative services, will reportedly be elevated to executive vice president, with Howie Klein, vice president and general manager at Warner’s Sire label, named president of Warner’s Reprise Records, which is expected to be broken off as its own label.

Rich Fitzgerald, current senior vice president and director of promotion at Reprise, will be elevated to executive vice president of Reprise Records, sources say.

One area that sources say will be revamped is the company’s black music operation.

Benny Medina, senior vice president and general manager of black music at Warner/Reprise, is expected to leave the firm after an announcement that the black department will be revamped.

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Chuck Philips contributed to this column.

Inside Hollywood

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