Radford seeks injunction; Spanish production company Gheko Films approaches UK and Irish authorities over financing troubles.

Spanish production company Gheko Films has approached the UK’s Department of Culture Media & Sport (DCMS) and Irish Finance Ministry to try and resolve its ongoing financial and creative disputes with the UK and Irish backers of Michael Radford’s Spanish Civil War drama La Mula, while Radford himself has issued a High Court injunction against Gheko Films.

These are the latest developments in what has been a hugely fraught co-production between Spanish outfit Gheko Films, Radford’s UK-based Workhorse Entertainment, Germany’s Integral Films and Ireland’s Subotica Entertainment with the UK Film Council, Irish Film Board, Eurimages, the Andalucian government and broadcasters TVE and Canal Sur providing financial backing.

Matters came to a head in October 2009 with only days remaining of the shoot in Andalucia, Spain, when Radford suspended filming due to financial concerns related to what he claimed were unsigned co-production agreement forms by Gheko Films, including standard collection, sales agent, distributor and lab agreements.

British-born producer Bruce St Clair and his Spanish wife Alejandra Frade, co-founders and heads of Madrid-based Gheko, refuted these contract claims, at the time saying that all co-production agreements had been signed and that they expected Workhorse and Subotica to deliver their side of the funding, predominantly through funds provided by the UKFC and Irish Film Board.

When Radford didn’t return to the shoot, Gheko drafted Spain-based French director Sebastien Grousset to finish the last few days of filming. Since then, relations between the British and Spanish producers have been strained and negotiations to resolve the disputes over the past months have been unsuccessful.

Radford told ScreenDaily today: “I suspended the shoot because the Irish Section 481 money which we would get in Ireland would no longer be available because it has to be invested before the last week of shooting. That money was going to fall through and my British crew had not been paid for their services because the money from the UK Film Council and Irish Film Board could not be available until Gheko Films signed the contracts.

“Alejandra then notified us that she had a new investor and was not going to sign the documents and that that was going to be the finance plan. I asked for assurance that everyone was going to be paid, but all I got was everything was going to be fine. It then became apparent to me that I would be personally liable for every debt that I incurred from then on knowing that the finance was not safe. So I would have been indulging in a criminal act, which I made Alejandra aware of, but got no response. I then gave them notice that I as suspending the shoot and after I did so they announced I had abandoned the shoot and carried on shooting the picture. So I was going to incur all the debts and they weren’t going to pay me and the film was continued without my assent.

“As a result there is now an interim injunction from the High Court in England to stop Gheko Films from defaming me in the press and to stop them from any further work on the film, including distributing it or using my name in any way. There was a two-week interim injunction on the basis that Gheko Films didn’t turn up on August 20 for the injunction hearing to contest it. The injunction was issued two weeks before that.  So it was extended for another month until the 17 September to give them time to come. This is pending a court action where I am taking them to court for going against the co-production agreement.

“They are trying to use my name for a project that part of which wasn’t shot by me. It is extraordinary what is going on. They have put together what we call a rogue film because the little bits I saw of it were atrocious and bore no relation to what I was trying to do.

“After two and a half years of work on the project, I never expected it would come to this. It has been the saddest experience of my life and extremely damaging to me professionally, in that they have been saying I abandoned the picture.”

Frade told ScreenDaily that she was aware of this injunction, but had not seen the full details and so could not comment at this time.

However, in a separate move uncovered by ScreenDaily, Gheko Films’ St Clair has written to UK Culture Minister Jeremy Hunt, asking for him to assist with financial complications relating to the funds from the UK Film Council and Irish Film Board intended for the project.

The UK Film Council has stated that it has $1.5m (£1.09m) in production funds readily available for La Mula, while the Irish Film Board made $61,450 available for the shoot. But so far only $47,300 has been released for development funding and the rest is being withheld because the UKFC and IFB support the claim made by Radford that Gheko Films has not signed important contracts.

In St Clair’s letter to Hunt, the Spanish producer argues that a proportion of the funds mentioned above ($1.2m according to Gheko Films) were placed in a defeasance account at the Anglo Irish Bank in order to trigger the Section 481 incentive in Ireland, which is based on completion of the film’s shoot.

Gheko Films query where this money has come from, why it hasn’t been released to pay for the expenses of the film and whether it is still in the account.

A senior spokesperson at the UKFC told ScreenDaily that they were unaware of Gheko Films’ intentions to contact the DCMS, however they did confirm that the account at Anglo Irish had been set up, but that the money has now been removed from the account because the shoot was not completed by Radford.

The UKFC added that they and the IFB were within their rights to remove the money as it belonged to them.

Frade has also written to Dermot Moylan, private secretary to Brian Lenihan, the Irish minister of finance, claiming that Subotica has not paid its agreed funds for La Mula totaling approximately $1.1m (€863.389), broken down as: €500,000 from the IFB, €314.000 from section 481 and the rest as deferred fees from the Irish producer. Plus she argues that the Irish company has not provided enough services to fulfil its participation in the film.

Tristan Orpen Lynch, producer at Subotica, told ScreenDaily: “We are aware that Gheko Films has approached the Irish Finance Ministry and the DCMS. I believe the IFB has written back to her saying they don’t agree with her. The IFB don’t accept that Michael abandoned the film and they don’t accept that we haven’t met our obligations. The only reason the film is in paralysis is that Gheko hasn’t signed the documents.”

Gheko Films is waiting to get full responses from both the DCMS and Irish Ministry Of Finance relating to these matters.

The Spanish production outfit also wrote to Eurimages and the Spanish Film Institute (ICAA) to explain the situation with the project as it had agreed loans for the project from both institutions (in the case of the ICAA it was an agreed loan from the ICO, Spain’s Credit Institute, which works with the ICAA in administering the national subsidies).

Frade told ScreenDaily she communicated with Ignasi Guardans, director general of the ICAA, at the end of May who recommended she conduct third party arbitration or the film would potentially be prevented from receiving a cinematic release. Unfortunately, Frade had already explored the arbitration route before with the other producers and financiers with no success.

“For the last months I have personally been in narrow contact with the authorities at the Irish Film Board and UK Film Council, to try to find the best outcome to the complicated legal and financial situation of La Mula,” Guardans told ScreenDaily. “One which is compatible with our respective legal framework of international co production, and which respects the legitimate rights and interests of the parties involved. I have also had a series of meetings and communications with the Spanish co-producer, in which we have suggested different exit strategies for this conflict, including a possible arbitration. Unfortunately, no acceptable solution has been found until now. We will keep working to try to find a way out which makes possible the termination of the film and its release. And we count on the good will of the co producers to reach that goal.”  

Frade adds: “I have invested a lot of time and money in the project, putting more than €4m of my own money into it. For the Canal Sur funding I had to go to the bank and give my personal guarantees to get the loan. Unfortunately, the UK and Irish producers have failed to make the necessary arrangements to put their money in the film. It is so sad that it has come to this.”

In the meantime, Gheko Films has completed most of the post production work in Madrid and not at Windmill Lane in Ireland as was originally planned, and Frade hopes to release the film as soon as possible. However, now with the injunction in place, plus the fact that a negative of the film is being kept at a lab in Soho and not being released to Gheko Films, it would seem this is going be difficult. Plus for a film to receive a commercial release, the producers must own complete intellectual property rights, which could be brought into question with La Mula.
Gheko Films is also suing Michael Radford’s company Workhorse Entertainment to get back money they claim they lent the UK outfit to cover production costs involving the director and British crew.

In response to this Radford adds: “They asked me in the very first weeks of pre-production to sign a loan agreement at interest to pay for the British art department with Spanish money, and are now claiming that I have been financially irresponsible for not paying back that loan. There is actually an article in the loan which says the loan doesn’t have to be repaid until the British backers have invested their money. But that is a detail. The point is that a loan agreement between two co-producers is unheard of. But it was the only way to pay my art department who were going to walk.”

James Hickey at Dublin law firm Matheson Ormsby Prentice is representing the interests of Workhorse Entertainment, Subotica, the UKFC and IFB, while Marie Louise Queally is dealing with the interests of Gheko Films.

All concerned are still determined to come to a reasonable agreement on how best to proceed together and Radford is determined to get back on board and finish the film the way he wants it to be.