Intertainment, the rights trader which is locked in an ugly litigation tussle with Franchise Pictures, has set A Window To Atlantis as the first project to flow from its deal with Hollywood veteran Arnold Kopelson.

The German group said on Friday (May 4) that it is now actively looking for new production partners to reduce its dependency on Franchise. The two companies have filed interlocking law suits over allegations of inflated production budgets. Intertainment CEO Barry Baeres today told investors that "several other producers" had offered themselves as partners. But he did not discount the possibility that Intertainment might continue its business relationship with Franchise,

Window To Atlantis, an action thriller, is the first project set up by Kopelson Entertainment under a tri-partite co-financing agreement between Paramount Pictures, Kopelson Entertainment and Intertainment. The two-year deal, signed at the beginning of 2001, sees the studio share development and production costs with Intertainment and Kopelson. In return, the US major studio will distribute and market these films in all media in North America. This time last year Intertainment and Kopelson Entertainment signed a five year financing arrangement, that gives Intertainment exclusive worldwide distribution rights to at least ten future productions.

Scripted by Chad and Carey Hayes, the film is the story of a young girl's disappearance at sea that leads an obsessed father to discover a plot to hide an alien underwater city.

Speaking after the meeting Baeres explained that Window To Atlantis is the first project that the three partners have agreed to work on, but that it need not be the first into production.

Franchise's films are due to make up 80% of Intertainment's planned $144m (DM315m) current year turnover. "At the moment, the relationship is certainly very weighed down, but in our business one should never say 'never'," Baeres said.

Baeres expressed confidence that the litigation will be decided in

Intertainment's favour. "Although we are expecting that the US courts will

decide in our favour, various scenarios are conceivable", he said. In the "best case" scenario, Intertainment would be repaid the $20m it believes it was overcharged and could then market five to six Franchise films at the "actual budgets". That which would see the company's profits on ordinary activities rise from $9.6mm (DM20.9m) in 2000 to $27.5m (DM 60m).

The "worst case" scenario, though, would see Intertainment having to accept the Franchise films at the higher budgets which result in the German company posting a loss of $13.3m (DM29m). Baeres indicated that Intertainment would also take delivery of the films in this scenario, and said: "then we would have to live with the loss".