Martin "Marty" Richards, who co-produced the 2003 Best Picture winner starring Catherine Zeta-Jones, Renee Zellweger and Richard Gere, claims he got just $US500,000 ($696,000) of the $US300 million worldwide box-office takings. He is seeking at least $US10 million more.
The lawsuit charges that Miramax Films violated a 1994 agreement with Richards that was witnessed by Madonna. His lawyer, Thomas Puccio, says Richards is the victim of "Hollywood accounting".
"There is a real difference between regular financial accounting and Hollywood accounting, where certain things were deducted from the revenues and certain things were included that were unfavourable to him," he said.
Richards, 74, the head of the Producers Circle theatre company since its founding in 1975, has helped to bring La Cage aux Folles and Sweeney Todd to the New York stage. He is also a film producer whose credits include such classics as The Boys From Brazil (1978), The Shining (1980) and Fort Apache the Bronx (1981).
The impresario brought Chicago, a musical by choreographer Bob Fosse and Fred Ebb, based on an earlier play by Maurine Dallas Watkins, to Broadway in 1975.
The story of two women in Prohibition-era Chicago who achieve celebrity while awaiting trials on separate murder charges quickly proved a hit and ran for more than 1000 performances. A revival is still playing on Broadway today.
After the first Broadway run, Richards and the Producers Circle Company bought the film rights for $US505,717.
"Mr Richards was determined it belonged on the silver screen and began a 27-year quest to fulfil this dream," the lawsuit says. In 1994 he signed an agreement requiring Miramax to pay 5 per cent of "gross receipts" after break-even.
The film won six Oscars, including Best Supporting Actress for Zeta-Jones. As a producer, Richards collected the Best Picture award.
The suit says Chicago became "the highest grossing and most profitable movie ever released by Miramax".
But Richards claims Miramax cheated him out of millions by making him take a cut of "net receipts", excluding DVD sales and foreign box office and deducting advertising and other costs. "He was reimbursed what he paid for the film rights. That's all he got. Plus he had to put up some expenses," Mr Puccio said.