May 23, 2014 8:32am PT by Eriq Gardner
'Spring Breakers' Production Company in Danger of Liquidation (Exclusive)
While Chris Hanley attempts to drum up business at the Cannes Film Festival in France, a serious financial situation is unfolding for his company, Muse Productions.
Earlier this week, Periscope Entertainment, which advanced Muse almost $300,000 for the film adaptation of Martin Amis' London Fields, filed a lawsuit in an attempt to collect the money. The complaint alleges that Muse had taken steps to hide its assets in light of a $300,000 stipulated judgment.
On Thursday, Periscope obtained a court order appointing a receiver for the purposes of collecting on the money. The order gives the receiver the immediate ability to collect, liquidate and distribute the proceeds of all assets and property of Muse, including the possibly consequential seizing of registered copyright interests that Muse owns on its motion pictures, Spring Breakers, London Fields and American Psycho, the 2000 film that starred Christian Bale.
"The issuance of an ex parte order granting extraordinary relief in Periscope’s favor on an emergency and expedited basis reflects the Court’s legitimate realization that each passing day increases the risk that Muse, as alleged, will transfer and dissipate, fraudulently or otherwise, valuable intellectual property, revenue streams and other assets necessary to satisfy the judgment, thereby rendering Periscope’s lawful and timely collection efforts ineffective," says Glen Rothstein of Greenberg Glusker, representing Periscope.
The properties at risk include Spring Breakers, for which Muse has signaled its wish for a sequel. Then there's London Fields, starring Billy Bob Thornton and Amber Heard (plus Johnny Depp in a cameo), which is now in postproduction and has could potentially release later this year.
Hanley and his business partner, Jordan Gertner, have been in France, but in reaction to Periscope's lawsuit filed earlier in the week, Hanley emailed The Hollywood Reporter: "In a free country the people have this right to make an invalid claim, or a valid claim not knowing whether the process of Law will support the claim. That certain parties make claims on motion picture ownership and copyrights, and other forms of statements, during the Cannes Film Festival with perhaps the intention of using the world renowned market and festival, well reported by top journalists, as a platform to voice such claims, the validity of which is yet to be determined, is to my knowledge the right of these parties."
Rothstein doesn't have particular sympathy for his situation.
"Muse consistently claims to be cash poor and unable to satisfy the judgment but apparently has the money to fund the defense of a multitude of lawsuits involving disgruntled financiers, including the present case," he says. "I am not aware of too many lucrative contingency-based judgment debtor law practices, so there must be money flowing in from somewhere to pay Muse’s attorneys by the hour. We’re not worried. We’ll find it."
Hanley could be forced to help out.
The judge has scheduled a June 9 judgment debtor examination hearing so that Hanley might provide sworn testimony in aid of facilitating collection efforts. In court yesterday, Muse's lawyer told the judge that Hanley would be out of the country attempting to raise financing for film projects and to pay off debts, according to Rothstein's law firm, provoking a warning that Hanley's failure to appear would result in the issuance of a "body attachment." Under such a scenario, the court would direct law enforcement authorities to bring Hanley into involuntary custody.
In reaction, Hanley tells THR that he intends to be in court. "June 9 was a court date set weeks ago," he says. "I have never missed a date of a court to to which I was to appear personally."
He adds, "In terms of the stipulated judgment Muse Productions signed in February for $305,000: One does not sign without the intention of satisfying such an agreement. The intention was always to do so and would take place before June 9 in any case."