Tipping point with VIP vote
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BERLIN -- The ongoing legal battle between London film financier Brass Hat and Germany's VIP over the remaining cash in VIP's film funds could prove a moot point.
Brass Hat signed a deal in 2007 with then-VIP head Dirk Specht to take over management of the some $110 million remaining in the German group's VIP 4 fund. VIP's current boss, Peter Riedel, has refused to approve the deal, and the two companies are fighting it out in the German courts.
But in a vote this week, VIP shareholders could decide to siphon off a good chunk of the disputed cash. By midnight Wednesday, VIP investors will decide whether to use VIP 4 capital to pay off an outstanding $58 million debt to HypoVereinsBank.
The bank, still reeling from its exposure to the U.S. subprime crisis, has called in the loan.
In the coming weeks, VIP investors will decide on whether to use the remaining cash in VIP 4 to invest in new film production. They also could demand a cash payout, a move that would essentially shut down the fund.
If shareholders decide against investing in new films, the Brass Hat deal would be next to worthless, according to Riedel.
"The contract (with Brass Hat) only applies to VIP monies that the shareholders decide to invest in new film projects," he told The Hollywood Reporter
Brass Hat CEO Lars Sylvest has accused Riedel of holding VIP shareholders hostage by refusing to let them vote on the Specht contract. In December, Riedel proposed his own slate of potential projects to VIP shareholders. While investors voted to greenlight the films, the VIP supervisory board overruled that given the legal dispute, a decision could not be taken at this time.