The HOODWINKED producers have filed suit against their distributor The Weinstein Co. over the failed release of the sequel in January, reports VARIETY. Filed in San Francisco County Superior Court, the claim from Kanbar Ent. wants the Weinsteins to enter in binding arbitration. Kanbar would like to settle disputes regarding The Weinstein Co. cutting off monthly production funds in Feb. 2009, its refusal to work with Kanbar on a release strategy and the Weinsteins lack of response to production changes.

Kanbar funded the original HOODWINKED completely on its own. While it had planned to finance HOODWINKED TOO! HOOD VS. EVIL by itself, the Weinsteins urged them to partner on a co-financing deal.

A Weinsteins spokesperson had no comment.