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Fox, Disney Countersue Genting over Failed Theme Park in Casino Resort

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Fox and Disney are seeking damages from the gambling and hospitality group in a legal battle over failed theme park project

Fox Entertainment Group, Twenty-First Century Fox and The Walt Disney Company have filed a countersuit against Genting Malaysia Bhd, the Malaysian gaming and hospitality company said earlier today in a bourse filing.

The move came a few months after Genting announced that it was suing Fox and Disney over a failed project for a Fox-branded theme park at its Resorts World Genting property. The integrated resort is located an hour’s drive from the Malaysian capital, Kuala Lumpur, at 6,000 above sea level. It features seven hotels, multiple food and beverage facilities, retail space, and a number of attractions. The property also includes Malaysia’s only land-based casino.

Resorts World Genting annually welcomes 23 million visitors but its owner looked to boost that visitor numbers with what would have been the first Fox-branded theme park in the world. However, the ambitious project never materialized.

In a lawsuit filed with the US District Court for the Central District of California last November, Genting said that back in 2013, it penned an agreement with Fox for the latter to license intellectual property for a theme park at the gaming and hospitality giant’s Malaysian resort. Genting went on to say in its 29-page complaint that Fox abandoned its contract and that Disney had instrumental role in its decision to back out of the deal.

News about Genting suing the entertainment conglomerates emerged as they were entering the final stages of Disney’s recently approved acquisition of Fox entertainment assets for $71.3 billion. Genting argued that Disney wanted the deal terminated as any association with a gambling company did not fit its “family-friendly” brand strategy.

The Malaysian gaming and hospitality company sought $1 billion in damages from the defendants, claiming that it had already spent more than $750 million on the theme park.

Fox, Disney Seek Damages, Too

In their countersuit, Fox and Disney seeks $46.4 million in annual license fees, royalties, and travel reimbursements pursuant to a Memorandum of Agreement signed between the involved parties on June 1, 2013. The entertainment giants also seek consequential damages and other relief under applicable law. Their complaint was filed with the same US District Court.

Genting said in its bourse filing from earlier today that its legal team was reviewing the counterclaim and that it would file a timely response to it. The company’s stock dropped 0.61% on news about Fox’s lawsuit to close at MYR3.26 for a total market cap of MYR18.37 billion (approx. $4.4 billion).

The gambling group recently found itself embroiled in another legal dispute as Las Vegas casino giant is suing its Malaysian counterpart for copying the design of its Strip properties Wynn Las Vegas and Encore. Genting is currently building the Resorts World Las Vegas integrated resort right across the street from the two Wynn properties. The company denied the claims leveled against it, saying that its luxury hotel and casino complex will look “dramatically” different from Wynn Las Vegas and Encore when complete.

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