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Woody Allen said Monday he had agreed to a five-million-dollar settlement with American Apparel just minutes ahead of a potentially embarrassing trial against the clothing company.
The US director-actor had sued the company, known for its racy advertising campaigns, for allegedly using without permission an image from his movie "Anne Hall" in which he appeared as a Hasidic Jew.
The Oscar-winning Hollywood icon had sought 10 million dollars compensation, but told reporters at the federal courthouse in New York he still secured a record.
"This is not how I make my living and five million dollars is enough to discourage American Apparel or any one else from ever trying such a thing again," said Allen, wearing his trademark thick-rimmed black glasses.
"I am told the settlement of five million dollars I am being paid is the largest reported amount ever paid under the New York right to privacy law," said Allen, 73.
Dov Charney, the controversial and eccentric founder of American Apparel, famous for turning up to work wearing only underpants, had intended to fight the lawsuit in a jury trial.
However, only a few minutes passed before the two sides emerged from the judge's chambers to announce a settlement.
"Perhaps unfortunately, the insurance company wanted to settle it," said Charney, 40.
He insisted he had used Allen's picture to prompt "societal discussion," as protected under the US constitution's first amendment, not to sell more clothes.
"This case was about the dignity of ideas," said Charney, who was unshaven, and wore a short-sleeved blue shirt and striped trousers.
Allen said the Canadian-born entrepreneur, whose basic but sexy clothing has a cult following, was told by the judge he had no chance.
"Their liability in the case was immediately clear to the judge who told them so. It was also clear that the court considered their phony first amendment ranting... sheer nonsense," Allen said. "I suspect this dose of legal reality led to their 11th hour settlement."
Although they agreed to settle, the two celebrities did not exchange personal comments when their paths crossed outside the courthouse.
Charney, who has been the subject of several sexual harassment lawsuits and who once masturbated in front of a female magazine reporter, was rebuffed in an attempt to hug Allen's attorney Michael Zweig.
"That is not appropriate," Zweig kept repeating as Charney moved closer, telling the much taller lawyer: "I'm going to miss you."
When Charney begged for at least a handshake, Zweig also declined.
Charney said he hoped to meet Allen "on more friendly terms" and that "I am looking forward to going to his next film."
The dispute began two years ago when American Apparel briefly displayed a picture of Allen in a thick beard and traditional Hasidic dress on billboards in New York and Los Angeles.
Both sides had slung mud ahead of what threatened to be a nasty trial.
Allen argued that American Apparel, famous for using young models in provocative and realistic poses for its ads, was "sleazy" and "infantile."
Lawyers for the company threatened to bring up Allen's colorful personal life, including the "sex scandal" of his marriage to adopted daughter Soon-Yi Previn, saying this showed the actor's reputation was not worth as much as he claimed.
Allen said outside the courthouse that he had been the victim of "threats and press leaks by American Apparel designed to smear."
Although Allen is believed to have appeared in advertisements early in his career, he has long avoided making endorsements.
In a deposition last December, Allen said he would not touch American Apparel, or its notorious ads, with a barge pole.
"The ones that I saw were -- were, you know, sexually gross in a witless and infantile way," he said, adding that American Apparel had a "sleazy image."
Allen, whose films are known for neurotic comedy and quick-fire dialogue, said that if he ever did do a commercial, it would have to be for "a large amount of money."
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