Disney Claims Blockbuster Held Back Millions

The Walt Disney Company has sued Blockbuster, claiming the nation´s largest movie rental business cheated it out of more than $120 million.

The breach-of-contract suit was filed Tuesday in federal court. It claims that Blockbuster used shady accounting, sold videotapes prematurely and failed to account for hundreds of thousands of missing videotapes under a revenue-sharing agreement.

Blockbuster ended the agreement at the end of 2001.

An attorney for Blockbuster disputes the claims. Lawyer Marshall Grossman contends Disney is trying to divert attention from recent corporate problems.

The agreement with Disney allowed Blockbuster to purchase Disney videotapes at a lower cost. That allowed Blockbuster to have more copies of hit movies on hand for rent. And Disney received part of the rental profits.

The two companies still do business. But Disney no longer receives a portion of the rental profits.