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Martin Scorsese’s Silence is finally coming out after more than a quarter century of frustration and legal wrangling but not before one last stunning development.
On Wednesday night, Cecchi Gori Pictures filed for Chapter 11 bankruptcy. The Italian production company was once a giant in cinema with Academy Award winning films, including Il Postino, Life Is Beautiful and Se7en. More recently, Cecchi Gori fought with Scorsese in court over the delay in making Silence and got a cut of the director’s other works, including The Departed and Shutter Island. Now, the company has hit hard times with founder Vittorio Cecchi Gori jailed in Italy for financial crimes. Cecchi Gori’s new management is pledging some comeuppance.
As part of the Chapter 11, Andrew De Camara, a senior managing partner at Sherwood Partners and Cecchi Gori’s current CEO, has submitted a declaration in California bankruptcy court that discusses bringing litigation claims against “entities that took advantage of the power vacuum created by VCG’s indictment and conviction.”
Cecchi Gori is still a credited producer on Silence despite selling rights when the film needed new money after Scorsese commenced preproduction in Taiwan in late 2014. Scorsese recently talked with The Hollywood Reporter about the problems in making the film. How Cecchi Gori ran into trouble is partly explained by De Camara in his declaration.
Vittorio Cecchi Gori is said to have transferred in 2002 more than $55 million from Cecchi Gori to other entities within his control “for his own personal benefit and to the detriment of creditors.” Three years later, an affiliate filed the equivalent of a Chapter 11 bankruptcy in Italy, according to De Camara, and hid that it had “substantial assets in the form of real estate and future revenues from films such as the blockbuster 300 and Seven.”
A proposed reorganization was rejected, and the company had more than $927 million in debt. A prosecutor in Rome began investigating, which ultimately led to a liquidation and criminal proceedings.
After a few years of corporate dormancy, ownership of Cecchi Gori appears to have now cleared up, and new management is in place to investigate debts and assets and possibly revive the Italian production company, which, according to De Camara, still has brand value, $148,000 in cash sitting in escrow and intellectual property valued at several million dollars. Nous S.r.l. has asserted control over Cecchi Gori and recently got a judgment in Los Angeles Superior Court confirming this.
According to De Camara, a preliminary investigation shows claims against Cecchi Gori from several entities. Among the largest unsecured creditors listed in the bankruptcy petition are Paramount Pictures and the Motion Picture Association of America. Additionally, a lien search “shows a filing in favor of the Screen Actors Guild with a purported security interest over certain motion picture projects.”
As for the next steps in the bankruptcy, De Camara hints at the fireworks to come.
“These bankruptcy cases were filed to recapture and monetize assets for the benefit of creditors and other parties in interest,” he states. “Some of those assets are in the form of valuable agreements related to films, film libraries and associated rights. Other assets will be in the form of litigation claims.”
He continues, “The Debtors’ game plan will require the Debtors to navigate and operate within the world of film studios and Hollywood, and it will require industry specific expertise. While I am in part stepping into an unknown situation, based on my experience, absent a chapter 11 bankruptcy filing, there would be no prospect for recovery for the creditors of the Debtors. By virtue of the chapter 11 filing and my involvement, as well as the involvement of Debtors’ proposed counsel and others, I am optimistic that the Debtors can once again be operated so that the assets stolen or misappropriated from the Debtors can be recovered, monetized, and distributed in accordance with the Bankruptcy Code, and a chapter 11 plan can be confirmed allowing the Debtors to emerge as a reorganized entity.”
The debtor is being represented by attorneys at Sheppard, Mullin.
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