• Tool Time: Profit Participation Lessons From 'Home Improvement'
  • May 24, 2017 | Authors: Vincent H. Chieffo; Jordan D. Grotzinger; Jeff E. Scott
  • Law Firm: Greenberg Traurig, LLP - Los Angeles Office
  • On March 22, 2017, the California Court of Appeal for the Second Appellate District issued its decision in Wind Dancer Production Group v. Walt Disney Pictures, addressing an incontestability clause in a profit participation agreement.[1] The court affirmed the enforceability of the clause, which deemed Disney’s summary participation statements “conclusively correct and binding” absent the participant’s objection within 24 months, but ruled that issues of fact precluded summary adjudication of whether, based on the studio’s alleged conduct, it waived or was estopped from relying on the incontestability clause. This ruling provides guidance to studios and participants on contractual language and conduct that could affect their rights.