As I have watch the very sad downward spiral of once promising actress Lindsay Lohan a it brings to mind a blog I wrote almost 4 years ago while she was working on a movie called “Georgia Rule. Sadly prophetic.

The Legalities of Lindsay Lohan written July 29. 2006

I have never seen a Lindsay Lohan movie. I do not read gossip columns, or frequent TMZ. I could not care less about her off screen antics. I however could not resist seeing what kind of threatening letter a top studio executive sends a 20 year old out of control, party-wild, self impressed actress when they are not happy with her work habits.

In this case it involves a movie in production called “Georgia Rule” in which she is the star. The studio is apparently concerned with Lindsay’s failure to show up for production calls and showing up late when she did show. They feel there is some relationship to her perceived excessive partying. In the letter James G. Robinson, CEO of Morgan Creek Productions, calls Lohan’s recent absences from the set “irresponsible and unprofessional.”

Being an attorney, I took interest in the letter. I scanned quickly through all the emotional rhetoric and right down to the legal threats. They of course threaten to take all action necessary to ensure the protection of the integrity of the film. Having some limited exposure to the film industry, the first thing that came to my mind and was what is generally considered one of the more costly aspects of a major motion pictures aside from salaries. This is the completion completion insurance or a “completion bond.”

Now you may ask, what the hell does insurance have to do with Lindsay Lohan and the making of her film? It may not have a lot to do with this film, but I can guarantee you it will affect her future films and if she doesn’t calm down. She may find herself a “B” movie queen because she will be uninsureable or it will be cost prohibitive to insure her.

When a studio is casting for a major production it is a crap shot on whether it makes money. Like most other business ventures it is about minimizing risk. If an actor or actress can not be insured or be insured for a reasonable amount in comparison to the projected revenues of the film that person is probably not going to get many starring or mainstream roles. This is because the producers of the film may not be able to get a completion bond.

A completion bond is a motion picture completion guaranty is a written contract that guarantees a motion picture will be finished and delivered on schedule and within budget. The majority of films produced and fully financed by the major Hollywood studios are self-guaranteed. However, most independently financed films, including many that are released and distributed by the major studios, require a completion guaranty.

A producer usually secures a completion guaranty for the benefit of the bank or other financiers who agree to make the necessary production funding strike price available to the producer. In general, a completion guaranty assures banks and financiers that:
1. The producers will complete and deliver the film in keeping with the screenplay, budget and production schedule that the bank or financiers approved; or
2. The completion guarantor will complete and deliver the film in keeping with such pre-approved screenplay and production schedule, and advance such sums in excess of the pre-approved budget necessary to do so; or
3. In the event production of the film is abandoned, the completion guarantor will fully repay all sums invested in the film by the bank or financiers.

If Lindsay, who is from what I hear a very talented actress when she is sober, does not get her act together soon, she will find herself relegated to low budget Indies such as “Herbie Retooled and Reloaded Again And Again And Again And Again”