A war of words has erupted between US producer Steve Golin and German powerhouse Kinowelt USA and Kinowelt Productions.
Chris Sievernich, head of Kinowelt USA, reacted with surprise yesterday after Golin and his production company Overt Productions Inc filed a breach of contract suit in Los Angeles Superior Court saying that he had struck a three-year development, production and distribution agreement.
Golin is seeking unspecified damages and an acknowledgement from Kinowelt that the agreement between the parties is valid and enforceable. "In all of my time in this business, I have never seen anyone behave so dishonorably as Rainer and Michael Koelmel, Chris Sievernich and Tom Garvin," said Golin in an LA press statement. They obviously don't realise that in this town when you shake hands, it means you have a deal, irrespective of your falling stock prices."
Sievernich, who is in Cannes, rebuffed Golin's claims. "We do not have a development, production and distribution agreement. We have tried for 12 months to negotiate such an agreement. After negotiating for 12 months, there were still open material points and we realised that we would not come to an agreement and informed Golin and his legal representatives that we terminated negotiations. Neither Kinowelt USA nor our litigator Ed Woods of Woods & Brown in Beverly Hills have received the papers and I'm disappointed that Steve - whom I greatly respect ' is of the opinion that doing business by press release is an appropriate response"
Since setting up Kinowelt USA last year, Sievernich has signed a five-year, first look deal with Gale Anne Hurd which has yet to generate anything. Kinowelt also boarded but subsequently pulled out of The Russo Brothers' Welcome To Collinwood which co-stars and is co-produced by George Clooney.
Golin claims that he and Kinowelt USA entered into a second-look deal in light of Golin's pre-existing first-look deal with USA Films. Kinowelt USA was to provide financing, foreign sales and worldwide distribution for films to be produced by Golin.
He claims that since operating under an agreement-in-principle since Oct 2000, Kinowelt suddenly reneged on April 2, 2001, claiming that a "substantial gap" between the parties was "too wide to be bridged." In the suit, he claims that he and Kinowelt had a binding and enforceable agreement and that they held a congratulatory meeting in Kinowelt's offices on Feb 23, 2001. Golin also indicates that, due to the pact, he gave up the opportunity to enter into one of several other "potentially lucrative" agreements.
Golin claims that the real reason for the breach is "financial problems suffered by Kinowelt's parent company Kinowelt Medien, including a sharp decline in its stock, as well as media reports that German security regulators were looking into allegations of illegal insider trading."
Golin was a co-founder and head of Propaganda Films and is CEO of production and management outfit Anonymous Content; his producing credits include Bounce, Nurse Betty, Being John Malkovich, The Game, The Portrait Of A Lady, Sleepers, Madonna: Truth Or Dare and Wild At Heart.
Meanwhile Kinowelt's assertion that no deal was finalised with Golin echoes the situation at Momentum Pictures, the UK distribution and production operation in which Kinowelt agreed to take a 50% share and jointly bankroll with Canada's Alliance Atlantis to the tune of $25m a year. Alliance is now covering the $75m that the two companies were to jointly invest over three years, while Kinowelt says the $75m was a target rather than set in stone.
Other than a stake in its Canadian parent, Kinowelt's only involvement in the UK operation is an agreement for Momentum to handle the DVD/video release of films from the Canal Plus/Carolco library.
"There was no agreement on the content of the collaboration," said Kinowelt's Rainer Koelmel. "We are not at the end of negotiations with Momentum. We have continued to meet here in Cannes about acquisitions and potential co-productions."
Koelmel confirmed that Kinowelt has not made any acquisitions at Cannes so far and that a future strategy would be for Kinowelt "to take theatrical and video/DVD rights and another unnamed company would take TV rights"
It emerged earlier in the market that New Line International was also looking for a new partner in Germany to replace Kinowelt with which it struck a three year deal in 1998.