They claim they paid $117,000 for the exclusive rights in August 2014 to the script Get It While You Can, which Terry wrote with his wife Teresa Kounin-Terry.
But there was a catch, they claim in the complaint filed Wednesday in Los Angeles Superior Court. The option agreement was contingent on the restructuring of $1.7 million in loans made to Terry by the investment company Chesterton Capital.
Silver Reel and LKL claim they attempted to restructure the loans until they found the terms were "usurious, illegal, unconscionable and unenforceable." They allege Chesterton, its principal John Walsh and Anne Brensley, who works with the company, want 235 percent interest on the loans and have refused the producers' efforts to negotiate. "Chesterton and Walsh are holding the Screenplay and Picture hostage from Plaintiffs unless outrageous sums are paid," states the complaint.
Why did Chesterton get away with the allegedly unfair terms? The plaintiffs claim Terry agreed to the three loans because he was undergoing cancer treatment while negotiating one or more of the loans.
"Terry was under physical and financial duress when he agreed on Get It's behalf to Chesterton's onerous loan terms," reads the complaint. "Regardless of the duress Terry was under, the terms of the foregoing loans are usurious, illegal, unconscionable and unenforceable."
But while the loans remain unpaid, Terry and his affiliates and the Chesterton defendants have continued to shop the screenplay to producers and talent, claim Silver Reel and LKL. The complaint notes that Silver Reel and LKL have approved Dallas Buyers Club and Wild helmer Jean-Marc Vallee to direct. But they claim the other producers have shopped the script to other studios, financiers and unspecified "third parties" in violation of the option.
Time is running out for Silver Reel and LKL. The option agreement is set to expire at the end of the month.
But they've requested the judge extend the option agreement until the lawsuit's resolution. They want an injunction preventing the defendants from shopping the screenplay to any third party. They're claiming unfair competition and interference with contract and prospective economic advantage against Chesterton, Walsh and Brensley.
Jeremiah Reynolds and Gregory Korn of Kinsella Weitzman filed the complaint.
The Joplin biopic was previously set up with director Lee Daniels (Empire, Lee Daniels' The Butler), with directors Catherine Hardwicke (Twilight) and Fernando Meirelles (City of God) attached earlier. Renee Zellweger was once set to play the musician, who died in 1970 of a heroin overdose.
This article was originally published by The Hollywood Reporter.