Film & Music Entertainment (F.A.M.E. AG) is to be dissolved after shareholders accepted management proposals to close the company.
F.A.M.E.'s executive board argued that negative market conditions and the remote prospects of recovery in the media sector made liquidation necessary. The board said there was "no possibility to profitably continue the company's business activities".
The liquidation of the company was preceded by news that chief financial officer and board spokesman Stefan Duvvuri had stepped down "by mutual agreement" with effect from September 30.
Shares in F.A.M.E. climbed by 33% to Euros0.28 on news of the liquidation.
F.A.M.E., which had floated on Frankfurt's Neuer Markt in August 2000, produced such German feature films as Bang Boom Bang and Kanak Attack, the English-language horror thriller 7 Days To Live, and the international co-production Josephine.
Meanwhile, London-based production house Film and Music Entertainment Ltd (F.&.M.E.), founded by Sam Taylor and Mike Downey in February 2001, announced a management buy out with parent company F.A.M.E. AG for its 60% shareholding in the company.
In a statement, Billy Elliot director and F.&.M.E advisory board chairman Stephen Daldry said "Mike and Sam have achieved an enormous amount with the company over the last eighteen months. This buy out will allow them the freedom to continue their company according to their original plans and strategy.