Walt Disney and 21st Century Fox has been sued for more than $1 billion by casino operator and resort developer Genting Malaysia for abandoning a contract related to its planned construction of the first Fox-branded theme park. (as per Reuters)
The lawsuit was filed on Monday in the Central California District Court and cites damages from Fox’s withdrawal from an agreement set in 2013 to license its intellectual property for a Fox World theme park in Resort World Genting. The theme park would have been Fox’s first. Disney prepares to complete its $71.3 billion purchase of many Fox assets.
There was no immediate response from Disney and a spokesman for Twentieth Century Fox Film, Dan Berger too declined to comment. Genting said the problems began as Fox engineered years of delays to force a renegotiation of the contract, which did not give it a share of gate sales.
But according to the complaint, Disney is now “calling the shots” and wants to end the contract because associating with a gaming company didn’t fit its “family-friendly” brand strategy.
Genting said Fox issued a default notice with the hope of terminating the contract, in a manner to benefit itself. The complaint read:
Given that FEG had no right to terminate the Agreement, Fox and Disney are liable for what will exceed a billion dollars in damages attributable to the bad-faith behavior of both Fox and Disney. Genting said it had already made a “$750 million-plus investment” in Fox World and is also seeking punitive damages.
According to the complaint, Resorts World Genting contains Malaysia’s only legal land-based casino, seven hotels, shopping malls, performance venues, gondola lifts and scores of restaurants, bars and clubs. More than 23 million people visit each year according to the complaint.
Despite disagreements over the specific terms of the deal, Genting said in a statement that Fox had no grounds to pull out. The complaint also alleges that Disney and 21st Century Fox interfered with the contract and caused Twentieth Century Fox Licensing and Merchandising, part of Fox Entertainment, to breach it.
Disney’s acquisition of 21st Century Fox raised issues because Genting’s resort includes a casino, which conflicts with Disney’s stance against gambling. Genting says it has invested nearly $180 million in the Fox project.
Its most recent quarterly report said the group was focused on developing its resort and on preparing to roll out the “highly anticipated 20th Century Fox World Theme Park” as well as another attraction, the Skytropolis indoor theme park. The opening of the Fox themed park had been planned for the first half of 2019.
