International sales specialist Mark Damon is taking control of troubled Montreal production and distribution entity Behaviour Communications, potentially halting the piece-meal disintegration of what was once one of Canada''s leading entertainment companies.
In a last-ditch rescue operation, Damon, who heads of LA-based Behaviour Worldwide, is converting $5.7m owed him by Behaviour into shares representing a 60% stake. Behaviour chairman Richard Szalwinski and vice-chairman Bernard Legendre have both resigned; Damon has been named chairman and CEO.
In addition, Szalwinski''s BHVR Communications, the company''s other major shareholder, has agreed to invest $5.5m in a convertible subordinated debenture of Behaviour. BHVR and a trust held by Damon and his wife have forgiven the ailing company a further $1.8m in debt.
Damon hopes the refinancing plan will convince banks and other investors that the company remains viable. "I am confident that we will be able to turn the fortunes of this company around," Damon said. Testament to the company''s dire financial state was the fact that Damon paid less than 10 cents a share for subordinate Class B voting shares. Last month, the company filed an application to the Canadian Securities Commissions for an exemption from filing its financial statement for the year ended September 1999.
Films produced by Behaviour include Sundance entry Love & Sex and political thriller, The Body, featuring Antonio Banderas and Olivia Williams, which recently completed principal photography.
The company, formerly Malofilm Communications, was purchased from Malofilm founder Rene Malo by Szalwinski, a software entrepreneur, in 1996. The period immediately following the purchase saw a rapid expansion from its core business into animation and multimedia as well as several production initiatives in Los Angeles, including a partnership with Damon''s MDP Worldwide that resulted in Behaviour Worldwide. That last three years have seen a continued decline in share value. One analyst described the company''s management situation as "a fiasco".