The beleaguered IM Internationalmedia filed for insolvency proceedings in Munich today since pending illiquidity was putting continued business operations at risk.
According to an adhoc communique, the reason for the illiquidity could be traced back to an investment group around David Bergstein, Eluvium Holdings, not paying for exercised options.
But Bergstein's R Media Acquisitions released a statement saying that Bergstein was not involved in Eluvium, only making introductions. R Media noted that 'Contrary to the claims of Intermedia management that its insolvency was a recent event somehow caused by third parties, Intermedia's insolvency dates back to 2005...R Media recently offered to lend more funds to IM, if IM would take the steps to correct its faulty financial statements. IM management refused.'
Earlier this year, IM had announced that Eluvium was finalising the specifics of a mandatory takeover offer for all shares of IM and near the completion of its financing and requisite background disclosures.
It had been planned to bring the exploitation of Eluvium's 1,000 library titles for the territories of Germany and Eastern Europe into IM Internationalmedia an investment in kind.
At the same time, Bergstein's investment group would then receive the exploitation rights of the IM film library for the territories outside Germany and Eastern Europe against a partial debt relief for the IM Internationalmedia Group.
According to the interim management report for the first quarter of 2008, the merger of the two libraries and the future productions of the IM Internationalmedia Group would have led to film packages being generated 'whereby a film like The Quiet American (IM film library) as a 'locomotive' is combined with several additional titles of the former investor's library or a new film of IM in combination with other titles of both libraries.'
'By implementation of this plan, the management board of IM Internationalmedia AG expects to make the company debt free, receive capital for productions and a speedy generation of revenues whch shall the bring the company into the profit zone,' IM had forecast optimistically at the time before the deal with Eluvium subseqently fell apart.
The company's shareholders and partners had been told in May that the available cash was 'at a critical level' and 'does not allow the company to start new film and TV projects independent from strategic alliances.'
Today's adhoc communique noted that IM had 'already got into financial disorder in the second half of 2007 after the abrupt cancellation of the film project Stopping Power.
Since then, no further project had been realised and the capital measures at the end of 2007 and the cooperation with a strategic investor did not bring about the hoped-for turnaround either.'
All was clearly not well at the company last week when it was announced that veteran producer Konstantin Thoeren was stepping down from all of his responsibilities in the Internationalmedia Group with immediate effect.
In addition, the publication of the half-year interim financial report for the first six months of 2008 was postponed from August 14 to the end of the month.
Moreover, Internationalmedia had attracted negative headlines in July with the news that actor John Cusack had filed a $5.6m lawsuit claim against Intermedia Film Equities USA Inc., Intermedia Film Equities Ltd. as well as IM Stopping Power GmbH and R Media Acquisition LLC regarding the cancellation of Jan de Bont's action film Stopping Power a year ago.
IM's management board has now indicated that it plans to continuing business operations of the IM Internationalmedia Group with the support of the insolvency administrator.