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Zuker-Douglas lawsuit sent to arbitration

March 2, 2009 12:00:00 AM PST
Attorneys for Michael Douglas have persuaded a judge to send to arbitration a breach of contract lawsuit filed by a producer over a film fund.Los Angeles Superior Court Judge Susan Bryant-Deason said Howard Zuker was bound by contract to resolve his dispute before an arbitrator and not in the courts.

Zuker filed suit last April 24 in Los Angeles Superior Court, alleging six causes of action, including breach of contract and inducement to breach of contract, against Douglas and other individuals and business entities.

Last October, he added allegations of fraud and deceit, as well as intentional interference with a contract.

Zuker sued on his own behalf and that of American Entertainment Holding Co., in which he has a 20 percent stake.

He is seeking lost wages and a $1 million bonus, saying he managed the firm while also active as a producer of Hollywood films.

Zuker says that he, Douglas -- who had his own company, Granite Investments -- and investment banker Christopher Baker worked together to develop a film fund to create movies based on the company's extensive literary library, which was created with money from Wall Street investors.

However, Douglas and the other defendants tried to "co-opt AEHC's opportunity for their own personal financial gain and, in the process, destroyed the deal and scared off investors," Zuker alleges.

Attorneys for Douglas and the other defendants maintain that all of the claims by Zuker are subject to an arbitration provision, and argued the lawsuit should be stayed pending the outcome of an arbitrator's decision.