New York-based venture capitalist Adi Cohen’s plans to invest in Spanish production company Zip Films through his company GC Corporation and new outfit Regal Entertainment have run aground due to financial disputes.

American Israeli businessman Adi Cohen set up the pan-European media company Regal Entertainment in November last year with the intention of investing in the production, distribution and exhibition of Spanish and German language films.

Regal announced that it would buy a 75% stake in Barcelona based Zip Films, adding to the 25% already announced as being purchased by the GC Corporation, a venture capital fund run by Cohen and owned by CA Capital Markets. But Zip Films now claims that no money ever materialized for either deal.

“We had signed an agreement with the GC Corporation for them to take a 25% stake in our company at a price of $4.6m (€3.7m), with a guarantee of $22.4m (€18m) over five years to invest in three films a year, but we never saw a penny,” Zip Films producer and founder Jordi Rediu tells ScreenDaily. “Then again we saw no money with the proposed 75% stake in our company from Regal.”

Cohen tells ScreenDaily in response: “After a prolonged period of due diligence and financial probe, we have decided to annul all agreements and discontinue our involvement with Zip Films due to financial irregularities. In accordance with the terms of the letter of intent we have fulfilled our initial responsibilities and obligations but opted to discontinue the partnership and sever all connections with Zip Films and its registered managers.”

A venture capitalist with a background in high-risk, security high-tech stocks, Cohen serves as Regal’s chairman and oversees all finance related operations from New York, while Zip Films’ Rediu heads up the Spanish operations from Barcelona and in addition serves as co-CEO of Regal. Igor Massa controls and oversees European distribution and Zip Films partner and producer Norbert Llaras serves as CFO.

“I now have to dissolve Regal as a company here in Barcelona because no funds are forthcoming,” explains Rediu. “We had paid for Cohen’s flights, food and accommodation over months with promises from him that he would invest the money promised, but he never did.”

Zip Films had planned to work on a number of high profile co-productions through their relationship with Adi Cohen and his companies, including Betsy And The Emperor with Killer Films, starring Al Pacino, and William The Conqueror, which is being written by Brian Edgar and Derek Wallbank. But they are now no longer involved in these projects.

With regards to Betsy And The Emperor, Cohen claims: “The film is an intellectual property owned by GC Corp. As part of the potential agreement with Zip Films, we have granted them interim rights of distribution to this film, limited for the territory of Spain and Portugal. Hence, we are under no obligation to do anything to the effect for it is our own asset.”

Despite these set backs, Zip Films is determined to move forward with its own projects, including the English-language $5m thriller The Body, directed by Rediu himself, which will be shooting in Barcelona in October.

“We have held meetings with Jokin Andueza at Barcelona based financiers Anglia Capital about them investing in The Body,” says Rediu. “Weare also in the process of trying to set up more international co-productions in the $12.4m (€10m) - $15m (€12m) price range with companies in the UK, US, Canada and Germany.”

Meanwhile, Regal Entertainment’s proposed buyout of leading German distributor VCL Film + Medien has also faltered due to alleged non-payment.

“We have not received a penny yet from Regal with regards to the buyout,” Datty Ruth, head of VCL Film + Medien, tells ScreenDaily. “We signed the contract for the deal and the date for payment was by April, but they still have not paid anything. Jordi Rediu is keen to secure the deal, but Adi Cohen wants to rescind it.”

Cohen responds: “The deal with VCL was signed under Regal Entertainment, which is partly owned by Zip Films and its managers. That is why it is currently in a waiting position until we can sort out the ownership structure of Regal. We will not, under any circumstances, engage in any sort of business, partnership or joint venture with Zip Films and its managers.”

Cohen claims that Regal still intends to buy major Spanish and German exhibitors, as announced in November last year, but he says their focus for now is restructuring the ownership of Regal and looking for potential new distributors to work with.