Bad Accounting Habits (Hobbits?) in Film Royalty Suit

A judge recently fined New Life Cinema $125,000 for failing to protect documents and e-mails related to a lawsuit between the moviemaker and producer Peter Jackson on royalties from the first episode of the Lord of the Rings film series (Fellowship of the Ring). An external document company has been called in--Jackson stands to receive multiple $millions from DVD sales and foreign receipts. A prequel, "The Hobbit," is being delayed while legal proceedings continue.

Accounting in the entertainment industry has long had a reputation of being somewhat less forthcoming than the average SEC publicly-traded corporation. The New Life-Jackson brouhaha appears to be burnishing the industry's reputation for less-than-inspired "creative" accounting.