Things have been relatively quiet over at JPMorgan Chase & Co. (NYSE:JPM) lately, after an especially turbulent time during which it looked as if CEO Jamie Dimon might lose a crown or two over the bruising London Whale debacle. Things resolved themselves nicely there, but now I see that JPMorgan has gotten itself in trouble again — and it went all the way to Hollywood to do so.
Sounds like a movie…
The big bank was mentioned, though not named, in a lawsuit brought by Paramount Pictures against Content Partners, LLC. There is a long-standing dispute between these two parties, which has resulted in suits and counter-suits regarding the equitable sharing of profits on a passel of films produced by the studio.
This latest salvo is basically in response to Content Partner’s 2010 lawsuit, alleging stinginess on Paramount’s part when it came to parceling out profits on films like The Truman Show. Now, the studio says that Content Partners conspired with JPMorgan to steal trade secrets, take unearned profits, and generally beat up poor Paramount. JPMorgan’s involvement stems from loans it made, as Chemical Bank, to investors in film projects. The loans were insured, and the banks were named as beneficiaries. Getting the picture?
A long history between Wall Street and Hollywood
Wall Street firms have long been involved with Hollywood projects, though they have been pulling back since the financial crisis. Goldman Sachs Group, Inc. (NYSE:GS) put up its own money in 2006 to back the Weinstein brothers’ new venture, and earlier this year sold its 50% interest in the CSI franchise to none other than Content Partners. JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp (NYSE:BAC) were involved in providing financing for the deal.
For a few years before the crisis, money flowed easily between New York City and Hollywood. When firms like Goldman, JPMorgan Chase & Co. (NYSE:JPM), and Merrill Lynch needed somewhere to invest back in 2004, the financial giants decided to give the movies another try after staying away for decades. Instead of backing single films, as was the norm, the big players created a whole new method of bankrolling: investors would now be able to put money into a whole slew of movie projects. With the advent of the financial crisis, however, things changed, and funding became much harder to find.