The partnership between German investor MBP (Medienbeteiligungs-und-Produktions Gesellschaft MBH & Co KG of Munich) and Australia's Beyond International, parent company of sales agent Beyond Films, seems to have soured.

Beyond has asked the Supreme Court of New South Wales to make a judgement on whether MBP Medien AG is obliged to purchase about $1.6m (A$3m) worth of new ordinary shares in Beyond and whether Beyond has the right to withhold about $245,500 (A$450,000) due as security.

But in a statement to the Australian Stock Exchange, Beyond has stated that it has significant concerns regarding its partner's ability to pay, in the event that the court finds in Beyond's favour. Consequently, it has not included the amounts in its cash projections. The matter will be heard on Tuesday of next week.

Beyond and MBP announced back in February 2000 that they had signed a four-year co-production agreement encompassing features, series and telemovies with a total budget of $27.8m (A$51m).

At the time MBP had already provided $12.5m (A$23m) of its total contribution of $17.7m (A$32.5m), principally for television but also for the horror film Cut. Beyond retained all distribution rights as part of the deal. Last year's box office hit Lantana owes its existence to MBP Medien AG, a public company associated with MBP.

Earlier this month Beyond recorded a $12m (A$22m) loss for the year ending June 30, principally due to $12.5m (A$23m) in writedowns, $10.7m (A$19.6m) of which was due to a revaluation of non-performing films and television programs in the catalogue.