Submitted by Jen Jones on Fri, 08/21/2009 - 7:49pm
The last installment of the hugely successful Terminator franchise was widely regarded as anemicâ€•except at the box office , where it grossed a healthy $370 million. That's a pretty good return on the film, and it hasn't even been released to DVD yet. So with that kind of success, you'd think the franchise owners would be laughing all the way to the bank, right? Well, not quite. This is another case that perfectly illustrates how complicated finances can beâ€•and how bankruptcy protection is an important strategic tool for individuals and business owners, even apparently successful ones . The L.A. Times reported that franchise rights owners Victor Kubicek and Derek Anderson have filed for Chapter 11 bankruptcy protection for three of their companies. The two producers filed with the Los Angeles Bankruptcy Court on the same day they filed lawsuits against their largest investor and a former employee of the company.
Kubicek and Anderson's company, Halcyon Co., has only produced one filmâ€•Terminator Salvationâ€•but they are no strangers to legal disputes. Their current troubles involve a debt owed to a California hedge fund, Pacificor, which financed their purchase of the Terminator franchise rights. The hedge fund initially loaned the pair $30 million, then followed up with two more loans totaling a further $9 million. Halcyon Co. has reportedly paid in $15 million of the total $39 million owed, but they are having trouble paying up the remaining $24 million in capitalâ€¦and that's before counting the interest that has accrued on the loan. In their lawsuit filing, the two producers allegeÂ that Pacificor put an illegal lien on another one of their companies, Dominion Holdings. It's through this company that Kubicek and Anderson receive payment as producers of the film, payments which are reported to be the greater of $5 million or 5% of revenue. According to Halcyon's attorney, the allegedly illegal liens on Dominion Holdings compromised the liquidity of Halcyon and caused the pair's current struggle to make payments. Citing between $50 and $100 million in both assets and debts, Kubicek and Anderson's attorney nevertheless express confidence that the company would make it through the bankruptcy filing and emerge from the process with a sound business able to meet all of its legal obligations.
Some media sources jumped the gun and reported Halcyon's list of creditors as a star-studded event, but a Halcyon spokesperson has since stated that many of those reported were not in fact creditors. Previously reported erroneously as creditors were, among others, Christian Bale, Arnold Schwarzenegger, Warner Bros, Universal Studios, and the law firm Latham & Watkins. The pair does in fact owe on some hefty bills from several other top industry law firms, including Greenberg Traurig, Glasser, Weil, Fink, Jacobs Howerd & Shapiro, and O'MelvenyÂ Myers.
Even as news of these developments breaks, Kubicek and Anderson are reportedly working in the beginning stages of a fifth installment of the Terminator franchise, which adds another layer to the already complex legal battle between Halcyon and Pacificor. The hedge fund's loans were secured with the franchise rights as collateral, which means that if the pair cannot meet their payment obligations, Pacificor could end up owning the franchise rights. Kubicek and Anderson would not be able to produce a fifth film, which could spell the end of a franchise that began in 1984 with the first Terminator film (starring a certain governor you may be familiar with.) Meanwhile, McG, the director of the fourth film, has told some media sources that he is actually planning a trilogy, of which Terminator Salvation was only the first installment. So what will happen with the now 25 year old franchise? For now we'll have to wait until the bankruptcy court settles the company's Chapter 11 filing to see whether Kubicek or Anderson will utter another "I'll be back."
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