A creditors’ meeting will be held in Galway later this week for troubled Irish-based production outfit Magma European Scripting House (MESH), which now looks set to appoint a liquidator.
Between 60 and 70 creditors are expected to be involved.
Last week, the City Tribune in Galway reported that MESH’s most recent accounts (for the year ended December 2007) revealed MESH owed creditors approximately €3.4 million, of which €2.8 million was bank loans and €415,000 is shareholder loans. The Tribune also noted that MESH had separate production loans from the Irish Film Board and other institutions amounting to just over €1.8 million. The accounts also showed that MESH was owed €3.1 million by debtors and had significant assets.
The Irish Film Board has made it clear that it will not suffer any fall-out from the move to put MESH into liquidation. The IFB has supported several Magma productions, most recently 3D animated feature Legends Of Valhalla - Thor and Oops, Noah Is Gone!
“This is a situation which we are watching carefully, however there is no IFB exposure to any loses incurred by Magma Scripting House,” an IFB spokesperson said. “In respect of production loans from the IFB to the Magma European Scripting House, the repayment of these is ongoing as projects are currently still being exploited worldwide. The liquidation of this company does not affect the IFB’s ability to be repaid on production loans as these are exploited by third party sales agents. Revenues are collected and paid out by independent collection agents.”
“To safe guard all investments the Irish Film Board makes, the IFB takes a security over a project and an interest in the project is registered with the company office on the rights of that project and any future recoupment on that project.”
Lawyer James Hickey, who begins as IFB Chief Executive on June 1st, has acted as Magma’s lawyer on their recent productions. (Hickey is a Partner of and Head of the Media and Entertainment law group of Ireland’s largest law firm, Matheson Ormsby Prentice.)
Speaking to ScreenDaily, Magma founder Ralph Christians sought to reassure creditors.
“The message is not to be excited and not to have anxiety. It (MESH) will be wound up in a decent way,” said Christians, who was named European Producer of the Year by American Animation magazine in 2009.
The Magma group of companies restructured in 2006. Christians said that Magma Productions and the various other companies in the Magma stable should not now be affected by MESH moving into liquidation. The German-born producer also stated that Magma’s commitment to Ireland remains.
“You have to see very clearly that the Magma Group has contributed in the last 16 years around 100 million (Euros) to the Irish economy,” the Magma boss said. “This is the turnover we did in Ireland. This is the money we spent in Ireland on Irish people and goods.”
Asked why he kept MESH going even after the restructuring, Christians commented: “I kept it in existence because we thought that, for example, bread and butter business could still run through it.”
Christians said that profits from other Magma companies could not be used to pay off the MESH debts. “In every project, you have other investors, other broadcasters, other distributors - you cannot just cross-collateralise.”
Magma Productions’ current projects include crime series Jack Taylor, based on a novel by Ken Bruen and starring Iain Glen, and Legends Of Valhalla - Thor.