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A film financing company that put up nearly $6 million for the production of “Stone,” a crime drama starring Robert De Niro and Edward Norton, is suing the film’s producers for allegedly duping them into losing their entire investment when the film bombed last year.
According to a complaint filed against Nu Image and Millennium Films by Mimran Schur Pictures (MSP) in Los Angeles Superior Court on March 30, David Mimran and Jordan Schur were successful businessmen outside the film realm until they decided to start MSP and invest in filmmaking.
They aren’t complete entertainment novices, though. Mimran, an investment banker, was the founder of Savage Records, a label that went bankrupt in 1993 and unsuccessfully sued its one big star, David Bowie. Schur is a former president of Geffen Records.
When Mimran and Schur decided to invest in independent films, they knew enough that foreign sales have traditionally been the life blood of the sector, but apparently not enough to realize how much the sector has dried up in recent years.
Together, the two invested $5.775 million in “Stone” and, according to the complaint, MSP was down the ladder in terms of priority for recouping its money.
First in line was Comerica Bank, owed more than $8 million in principal and interest, followed by Nu Image and Millennium, due a 5 percent international sales agent commission. In other words, MSP wouldn’t start seeing any money until after $8.58 million came in the coffers.
Mimran and Schur say they did the deal anyway based on a projection that estimated foreign sales would be somewhere between $10.3 million and $16.4 million. But now they are accusing the defendants of exaggerating these estimates to win their investment.
“The industry depends on the accuracy of international sales estimates, and producers generally trust international sales agents to provide reliable estimates at the time the budget of the film is developed and film financing is sought,” says the complaint.
At the Toronto International Film Festival last September, a Nu Image executive allegedly explained the estimate was impossible because the market in Asia had collapsed, adult dramas were suffering in the tough economic climate, De Niro’s foreign cachet was diminished, and Angus MacLachlan’s script for “Stone” was bad.
The film, distributed domestically by Overture Films, grossed just $1.8 million upon its release last October, traditionally the quietest time of the year at the box office. Said Hollywood Reporter critic Kirk Honeycutt: “There is not a credible moment in this overly calculated melodrama.”
MSP now is suing to get its $5.775 million investment back plus punitive damages. Nu Image declined comment.
Copyright © 2011 Reuters