Spare a copper guv....?

[TheOrcWithNoName]

Such creative accounting seems to be quite rife across big corporations, film studos and of course, financial institutions such as the odorous banks & loan companies.

I hope lessons will be learnt and that there will be laws demanding more clarity when it comes to cash flow, profits and who gets what.




...although I am not holding my breath!

[davem]

http://www.laweekly.com/2009-05-21/n...llywood-style/

Now investment bankers Moelis & Co. have been hired to advise the studio on a potential restructuring and to explore options for optimizing its capital structure (i.e., talking to lenders about altering MGM’s long-term debt obligations). “You lower your interest payments, you free up cash to make more movies,” a source tells me. “With debt selling at a discount [50 cents on the dollar], every company is doing the same.”

I hope this new plan of attack can help. Because it’s vital to Hollywood that this buyer survive. Everyone knows that Mary Parent has been holding the studio together with the equivalent of chicken wire: specifically by partnering with studios left and right because they are willing to front the costs of each production. Things aren’t much better on the TV side. And if the auditors declare MGM technically insolvent, all hell breaks loose.

Honestly, I don't know if this could cause problems with the Hobbit movies - if MGM are unable to go ahead then doesn't Zaentz get the rights back?- & I would assume a bidding war among the studios follows - which may stop the current production altogether, & that throws out everybody's plans.

[Mithalwen]

Originally Posted by TheOrcWithNoName

Such creative accounting seems to be quite rife across big corporations, film studos and of course, financial institutions such as the odorous banks & loan companies.

Bear in mind there is just the one accountancy joke:

What is 2+2?

What do YOU want it to be?

[Morsul the Dark]

the tolkien estate makes 7.8 million dollars a year, and I hate to say this however, movie studios make movies so they need funds more dearly than the estate.

Creative accounting is everywhere, especially "Non-Profits" just give the "not profit" money to some as a bonus voila profit gone.

[Boromir88]

Creative accounting is everywhere, especially "Non-Profits" just give the "not profit" money to some as a bonus voila profit gone.~Morsul

True

the tolkien estate makes 7.8 million dollars a year, and I hate to say this however, movie studios make movies so they need funds more dearly than the estate.

True as well...but here comes the but (there's always a but )

The estate also gives millions of dollars to charities and the point of the lawsuit is to seek money that is owed to them. Money that they deserve from a contract signed 40 years ago.

Not to get into some philosophical state of the world (well I guess that is the point if I'm bringing it up ), but it's interesting how in LOTR there is a lot of power behind sworn words, oaths. Now we move into a world where a person's "promise" means very little (if anything at all) in a court of law. You need a signed contract, and now it's about trying to find loopholes to break a signed contract. They broke their obligations, and should pay up, whether it's to a multi-million dollar estate or not.

[William Cloud Hicklin]

Technically the plaintiff in the suit is not the Tolkien Estate, but the Tolkien Trust, its charitable arm, which gives millions in philanthropy.

More to the point: even if the plaintiff were the Manson Family, if they have a contract it must be honored. Full stop.

[davem]

This may be of interest - Charity Commission page for the Tolkien Trust http://www.charity-commission.gov.uk...idiaryNumber=0
You can download their accounts for the year ending April 2008 & see what grants they've made - a total of £1,325,425. (Its in the 'About this Charity' box on the top left - just click 'View Accounts') You'll also notice this little statement

The substantial increase (£187,716 in 2007 to £311,737 in 2008 - or £124,021) in Solicitors' costs and Other legal fees arises from the claim against New Line Cinema in connection with which legal proceedings were commenced in February 2008 ....

The Trustees have been advised that they are entitled to an accounting for their share of a gross profit participation due in respect of the recently released films based on "The Lord of the Rings", as successors-in-interest under a contract entered into in July 1969 which disposed of the film rights in that work. Together with two other plaintiffs jointly entitled to such accounting, they commenced legal proceedings against New Line Cinema in the courts of Los Angeles in February 2008. The three plaintiffs are collectively claiming compensatory damages in excess of $150 million and other relief in the proceedings. An audit is in progress to quantify the claim and the proportionate entitlements of the plaintiffs. The anticipated cost of the legal proceedings remains in the range $1.5 to 2.5 million.

in other words £124,021 which could have gone to good causes has had to be spent by the Trust in pursuing its legal obligations - & yes, as I understand it they are obliged to chase New Line for the money.....

[Bêthberry]

If New Line is found negligent, can they not be required to pay the Trust's legal costs?

[Mithalwen]

Originally Posted by Morsul the Dark

, movie studios make movies so they need funds more dearly than the estate.
.

Not sure that their need is greater than the many medical, humanitarian and educational charities that the Trust gives to. I don't see why the trust should effectively subsidise the film industry which is what they will be doing if they give up and go home - which seemingly isn't an option anyway.

However given the scandals close to home... surely there is a point where the accounting is so creative that it becomes a criminal rather than a civil matter? Surely the taxmen must be after their cut too?

[davem]

http://www.nbcmiami.com/news/enterta...-Them-All.html

Seems the Trust are in front at this stage.