Universal Pictures has reached a $26 million settlement in a class action lawsuit over underpayment of royalties to creative professionals who worked on home-video releases.
The proposed settlement presented to Los Angeles Superior Court Judge Elihu M. Berle applies to directors, writers, actors and others who alleged they were short changed by the studio, a unit NBCUniversal in Universal City.
Berle will hold a July 15 hearing during which he will consider requests to approve the settlement, which creates two $13 million funds for paying the plaintiffs. Attorneys could receive up to $4.3 million in fees.
The lawsuit was filed in 2013 by the estate of late producer and director Colin Higgins alleging that Universal had not paid a fair share of the royalties coming to Higgins from the 1982 film, “The Best Little Whorehouse in Texas.”
Specifically, Universal had calculated the profit participation of Higgins based on 20 percent home video revenue instead of 100 percent as outlines in contracts.
Universal denied the allegations and the royalties it paid violated any contracts.
The suit was just one filed in the same time period against other major studios, including Warner Bros. Entertainment, 20th Century Fox and Paramount Pictures, alleging they had underpaid home video royalties.