[Sauron the White]

from WCH

Accounting terms don't exist in a vaccum*: definitions and acceptable methods are rigorously defined in the 'generally accepted accounting practices' established by the American Institute of Certified Public Accountants.

If that is so cut and dry, what do these rigorously defined standards say and mean as it applies to film revenue and expenses?
Until we know that, all this is just idle speculation based on next to nothing.

Moreover, I take 'certain specified costs' in the contract to mean that only certain expenditures can be counted.

And until we know if those "certain specified costs" are listed, enumerated or defined in the contract, such statements are merely speculation.

I would be utterly *un*surprised if New Line loses the Hobbit rights or is forced to sell them. Courts generally always refuse to enforce contracts in favor of fraudsters and deadbeats.

Fraud must first be proven in a court. We are light years away from that. And even if those rights are eventually stripped from New Line, they revert to Saul Zaentz. The Tolkien Estate has no claim on Saul Zaentz.

Or is that what they are going to try to do in the end? Leapfrog over the rights of Zaentz to somehow, someway claim that they want them back?