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THE BIZ / ALAN CITRON and ELAINE DUTKA

Universal Pictures' Real Courtroom Drama : Litigation: The studio, accused of malicious and unlawful conduct by its former marketing chief, denies any wrongdoing.

July 30, 1993|ALAN CITRON and ELAINE DUTKA

It's the most popular sequel to soured business deals in Hollywood, and it's coming to a courtroom near you: The Avenging Lawsuit.

Kim Basinger involuntarily starred in such a case earlier this year, after backing out of "Boxing Helena." MGM's recent firing of Chairman Alan Ladd Jr. is expected to set off similar legal fireworks. Then there's the case of Kornblit vs. Universal/MCA, which offers its own window on the inner workings of the movie business.

Si Kornblit ran marketing for Universal Pictures from 1987 until April, when he suddenly departed without much explanation. Little was heard from him in the following months. But now Kornblit has emerged with a 46-page Los Angeles Superior Court complaint accusing Universal/MCA of malicious and unlawful conduct.

Kornblit's suit blames his problems on a long and troubled contract negotiation. He says things got truly ugly when he decided to resign rather than accept the studio's final offer.

That afternoon Kornblit says he received a "vicious and hysterical" call from Universal Chairman Tom Pollock, who was on the set of "Schindler's List" in Poland with director Steven Spielberg. Pollock told Kornblit to vacate his office immediately, according to the suit, then ordered him to make himself scarce at the following night's premier of "Dragon: The Bruce Lee Story."

When Kornblit protested that he should rightfully be there as a friend of director Rob Cohen, the suit says Pollock put the "do not attend" order in writing.

Pollock declined comment on the court case. Universal attributes the suit to the "actions of a disgruntled ex-employee" and denies any wrongdoing in its treatment of Kornblit, who is being paid for the remainder of his contract. Privately, sources say that Kornblit was handled so brusquely out of fear that he would make a scene at the "Dragon" premier and because Pollock resented learning of his resignation second-hand, and over long-distance phone lines.

But Michael F. Perlis, Kornblit's attorney, says the marketing executive has substantive grievances against MCA and will seek millions of dollars in punitive damages.

"Hollywood, as evidenced by the Kim Basinger suit, is on a mission to honor contracts," said Perlis, who is with the law firm of Stroock & Stroock & Lavan. "We have to be certain that standards of behavior are enforced--and contracts are one of them."

According to the suit, Kornblit's contract dispute first arose when MCA created a new incentive program for executives following its 1991 sale to Matsushita Electric Industrial Co.

Under that plan, American Depositary Receipts (the equivalent of shares) in Matsushita were to be substituted for Kornblit's old compensation package, which included shares in MCA and cash "in lieu of stock" payments. Further, the Matsushita shares would not be fully vested until 1998.

Kornblit maintains that move violated the law, since the Matsushita shares had "a substantially lower value" than the MCA stock provided under his employment agreement. It was against this backdrop that the marketing executive went into contract renegotiations, according to the suit, which says Universal offered him a big raise in December, 1992, if he agreed to stay on until 1994.

Kornblit says he made two additional demands at that time: that his stock be vested in 1993 instead of 1998 and that he be given a title commensurate with his duties--president of marketing.

Pollock flatly turned down the title request, according to the suit, and MCA subsequently rejected the stock idea as well. The discussions continued for much of last spring, however, with power attorney Ken Ziffren negotiating on behalf of Kornblit, who supposedly made clear his plan to leave when his contract expired at the end of the year if certain demands weren't met.

Kornblit says things came to a head on April 15, when salaries and promotions were approved for every marketing employee except him. Eleven days later, after still failing to resolve his future, the marketing chief told his staff that he planned to leave at the end of the year.

Kornblit said he saw the move as a way to put troublesome rumors to rest and ensure his staff that he was "fully committed" to carrying out responsibilities that included marketing "Jurassic Park." But that didn't go over well with Pollock, who is said to have considered Kornblit's behavior unconscionable. The suit says the studio chief "shouted that Kornblit was through" and that he was being fired for "incompetence."

Kornblit says Pollock's action left him "shaken and distraught." MCA maintains that the marketing chief actually left voluntarily. On the issue of his formal title, which seems on the surface to be a small matter, sources say that Universal didn't feel he had shown enough leadership skill. Kornblit will now show if he has enough skill to prove them wrong in court.

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