Bullets over Broadway as one of film's most celebrated friendships ends in a bitter lawsuit

Woody Allen has a talent for finding comedy in tales of crimes and misdemeanours, but there was only glum resignation on his face when he turned up in a Manhattan court yesterday to try to recoup money he says he is owed by his former friend and producer of his films, Jean Doumanian.

Seated feet from Ms Doumanian, a best friend for 30 years and one-time daily dinner companion, Mr Allen rested his bespectacled head in his hands and never once looked either at her or at her co-defendant, Jacqui Safra, or, for that matter, at the assembled jury.

To the astonishment of some of his fans, Mr Allen, 66, filed a suit last year against Ms Doumanian and Mr Safra, suggesting that they had failed to give him his due from eight films that he made with them during the 1990s. One of them was Small Time Crooks. But according to Mr Allen's lawyers there was nothing small time about the financial damage inflicted on him.

"Woody Allen was deprived of nearly $12m," Michael Zweig asserted to the jury in his opening arguments in the Manhattan Supreme Court, adding that money had been diverted through "sleight of hand" and "accounting shenanigans".

Ms Doumanian and Mr Safra, co-heads of the Sweetland Films production company, came to the financial rescue of Mr Allen in 1993 with a three-film funding agreement, under which he was to get a salary and a cut of profits after investments were recouped. They were Bullets Over Broadway, Mighty Aphrodite and Everyone Says I Love You.

The deal apparently started to get fuzzy when Sweetland bankrolled the next five Woody Allen movies – Deconstructing Harry, Wild Man Blues, Celebrity, Sweet and Lowdown and Small Time Crooks – with no more than handshakes between friends. It was from these films, Mr Allen contends, that his one-time saviours starting withholding cash that was due to him.

"All of the money in dispute went to two persons, Jean Doumanian and Jacqui Safra," Mr Zweig told the jury, noting that during the filming of Celebrity their production company bought two Aston Martin cars at $40,000 each. When the film was done, he said, one was sold to Mr Safra for a mere $5,000 and "is sitting in the Safra Vineyards in Napa, California".

This is a dispute that has apparently wrecked on one of the industry's most hailed friendships, cemented when Ms Doumanian came to Mr Allen's side during his messy separation from Mia Farrow in the early 1990s and his subsequent love affair with their adopted daughter, whom he has since married, Soon-Yi Previn.

Mr Allen, whose latest film, Hollywood Ending, made in collaboration with Dreamworks SKG, has barely made a dent on the North American box office. He has said he launched the lawsuit only after long thought and with much reluctance. Ms Doumanian has declared she wants nothing more to do with the comedian.

The lawyer for the defendants, Peter Parcher, said Mr Allen was overreacting and and was being manipulated by his handlers and managers, calling them his "Hollywood Harrys". He argued that Mr Allen had received everything coming to him from the films – $19.5m – and that he in fact owed money to his clients.

"This is a bogus case orchestrated by Woody Allen's handlers," Mr Parcher told the court. "Woody Allen does not negotiate. He makes movies. His handlers negotiate. He followed the suggestions of his people. They thought they had a golden goose they could fleece."

The trial, which formally began with jury selection on Thursday, is due to last two weeks. Mr Allen was preparing to take the stand last night.