We can hear the legal saber-rattling from here, but we also know there's precedent — and it favors Wall Street.

In a nutshell, the two-phase Melrose fund underwrote up to 20% of net production costs on films like Mean Girls, War of the Worlds and even The Stepford Wives — titles with wide-ranging but ultimately profitable gross performances based on factors beyond box office (product placement, television licensing, toy deals and more). The Melrose group said that results for Melrose I "collapsed" after Dolgen and Lansing left, with even successful films failing to turn a profit for the investors.

Making matters worse, a source close to the situation tells Defamer that spending on P&A went up almost 50% under ex-Paramount COO Rob Friedman and nearly doubled under Grey; an advisor to the group describes Grey's takeover as "[o]ne of the most stunning exercises in spending (he's) ever seen in his thirty-five years."

A studio source said the results of Melrose II "make Melrose I look like investing in Google pre-IPO," while an investor said: "Since we had no say in what movies were being made, what [we] were backing was Dolgen's conservative risk management strategy which had proven successful in the past. Once he was gone, fiscal controls began to deteriorate and when Brad Grey took over they went out the window altogether."

With Melrose II still in force and Grey apparently tightening the reins of late, we hear the investors reportedly want Paramount to credit a "retroactive reduction in P&A spending" to its account — like, yesterday. Again, this isn't necessarily new: Sony agreed to something similar earlier this year for investors in its Gun Hill Road fund. But Melrose's financial terms aren't specific, and best of all, even Viacom CEO Phillippe Dauman reportedly has told the investors to stand down or face a counterclaim.

It's not the sexiest contretemps in the Official History of Hollywood Pissing Contests, but with Grey on the hook, it bears noting. What do you know about it?

[Photo Credit: Getty Images]

Saw Sherry Lansing and William Friedkin dining with another unknown couple in a banquette at La Dolce Vita in Beverly Hills Monday night, June 12th. Both Friedkin and Lansing could use a wardrobe makeover since her unflattering black suit was so plain it was almost nondescript. At least she could have unbuttoned her jacket at the dinner table. Lansing is certainly pretty enough to pull off a glam/fem Wunderkind designer power suit. Who or what was she hiding from? Her beautiful, savvy self? I say wear killer suits with the boardroom boys and., make no apologies about it when doing the office-to-dinner dash. We'll still think of you as a serious business person... now one with taste who remembers that she's a woman, too.

Mr. F. has got to lose the burnt-orange leather bomber jacket which he wore all through dinner. He hasn't made a great movie since '73, but someone should tell him that they have made great jackets since then. And eyeglasses, And pants. And hair product. And...

It's tough love, sure, but we bet that the next time Lansing and Friedkin step out for a nice meal, they're decked out in something a little sassier.

• Fauxteur Fashion Minute: Bay Stylin' And Profilin' [Defamer]

• Hollywood's New Old Girls' Network [NYT]

• Sherry Lansing Hand And Footprints Ceremony [Getty Images]
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• Hollywood's first female studio chief immortalised in concrete [TurkishPress.com]
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• Sherry Lansing To Touch Wet Cement, Disappear Forever [Defamer]

Sherry Lansing, groundbreaking and innovative chairman of the Paramount Motion Pictures Group, will be immortalized in a Hollywood landmark when she places her hands and footprints in cement in the forecourt of the world-famous Grauman's Chinese Theatre in Hollywood.

OK, we'll allow that maybe we're being unfair to Lansing. There are probably hundreds of tourists anxious to be photographed matching their hands with the ones that greenlit Crossroads, Paycheck, and the remake of The Stepford Wives.

• Sherry Lansing Hand and Footprints Ceremony [PRNewswire]


• sherry lansing’s exit interview: hug your way to the top [Defamer]

The Hollywood rumor mill worked you over pretty hard in the early days. For years people gossiped that you got jobs from men because you were intimate with them.

There was no truth to any of that, of course. None. But if you're the first, it goes with the territory. People are always making up reasons why you got the job, rather than understanding that you got it because you worked hard. Then you get older, and no one says that anymore. [Laughs]

Fair enough. Not every female executive in Hollywood sleeps her way up the studio ladder, even if they work on the lot where Robert Evans has a waterbed. (Well, we really want him to have one, anyway.) Even so, Lansing isn't afraid of her womanly side.

You've always seemed comfortable being feminine. I remember the first time I met you, seven years ago, you hugged me.

[Laughs] I like to hug people. I don't hug everybody, but I like contact. Part of being in the movie business is wanting to reach out to people, to connect.

There you have it: "Hugging" is the new "fucking your way to the top." Give it a try, but please be careful not to break your nose on the glass ceiling.

• The Goodbye Girl [Newsweek]


• Previously: Sherry Lansing Leaving Paramount [Defamer]

• Viacom Taps Talent Manager for New Studio Chief [Reuters]


• Paramount Still Trying To Consummate Love With Brad Grey [Defamer]


• Brad Grey To Turn Around Paramount Overnight...Or Die Trying [Defamer]

[Photo: Mark Mainz/Getty Images]

• Revelers lather up for Par [Variety, sub. req'd.
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• Sherry Lansing Leaving Paramount [Defamer]