11:23am PT by Eriq Gardner
Director John McTiernan Wants to Make a 'Thomas Crown' Sequel to Fight Bank Liquidation
Last year, John McTiernan was touting a Hollywood comeback. The director of Die Hard, The Hunt for Red October and Predator was in Chapter 11 bankruptcy after spending 10 months in a South Dakota prison cell. He had plead guilty to lying to law enforcement officers investigating him for hiring private eye Anthony Pellicano to spy on a colleague.
After getting out of jail, he began fighting with First Interstate Bank, which wanted to foreclose on his 3,254-acre ranch in Wyoming. The bank aimed to liquidate, but McTiernan convinced a bankruptcy judge to hold off on converting the case to Chapter 7 by speaking out about how he was on the verge of getting $1 million for a script he had penned and was going to be working on a Top Gun-type film titled Warbirds, starring John Travolta.
But in the months that followed, McTiernan, now 64, has suffered disappointments, an aggressive bank, tax arrears and an aggrieved ex-wife. On Thursday, he faces a bankruptcy hearing that could put First Interstate Bank in control of his assets, including royalties from past hits.
Both McTiernan and First Interstate have presented dueling plans to the court for how to pay creditors. Understandably, McTiernan doesn't like the bank's harsh liquidation scenario, but he has struggled to explain why he hasn't yet sold the Wyoming ranch. McTiernan has agreed to give up his trophy ranch to live debt free and go back to directing movies, but he hasn't disposed of the property yet because he can't get a satisfactory offer. In court documents, he says Sotheby's has listed the property for nearly $10 million, and he's refused an offer for $7 million. Meanwhile, the director has struggled to get his dream film project off the ground.
"John's fondest dream is to shoot a sequel to his very successful Thomas Crown Affair," his attorneys reported to the bankruptcy court this past spring. "When he first floated that bubble he met with consternation from MGM whose attorneys asserted a proprietary interest in the theme and demanded he cease and desist. Diligent follow-up on John's part has revealed that the original rights holder controls the concept and is quite amicable to the project."
As McTiernan works to save a sequel to Thomas Crown Affair, he has discussed other potential work. Warbirds is one such project. Another is titled Venice Pier, which he expects to bring in $1.2 to $2 million in director's fees. A third movie he's working on is called The Sleeping Dogs of Amagansett, described by his attorney as a story "rich in irony with evil investment bankers all being pet owners and the hero learning to leave sleeping dogs lie."
This hasn't satisfied First Interstate, which provided the mortgage for the Wyoming property and is now owed more than $6.4 million with interest accruing $1,606 every day. The bank has called McTiernan's plan to pay debts a "pipe dream" and has doubted the director's cash flow projections.
Worse, the bank says McTiernan has taken no action to attempt to pay his creditors and aims to sell his ranch for 120 percent of its appraised value. "He did not hire an accountant, did not file tax returns, did not list any real property for sale, failed to timely file monthly financial reports and failed to file the Report of Entities [on his corporations collecting residuals]," the bank told the bankruptcy judge in a filing last week. "The Debtor's promised screenplay sale has never materialized (or at least never reported) and the Debtor has no income from his personal services."
With doubts about McTiernan's Hollywood comeback circulating, there's been quite a game afoot in advance of tomorrow's hearing. His creditors get to vote on which bankruptcy plan — trust McTiernan or liquidate him — to accept. But who votes?
One of the creditors is the U.S. government. The IRS reports being owed more than $109,000 from McTiernan just for 2010. The tax agency also told a bankruptcy judge on Sept. 30 that McTiernan still hasn't filed taxes for 2012, so there's money owed there too. The IRS has filed objections to both McTiernan's and First Interstate's plans. The bank is negotiating with the agency.
Another possible creditor is a rancher by the name of James Jellis, who has gotten into an odd dispute with McTiernan over an oral agreement to keep buffalo on the director's ranch. The case has gone all the way up to the Wyoming Supreme Court, and the bankruptcy judge will need to decide whether he gets a vote.
Maybe the most interesting creditor is McTiernan's ex-wife Donna Dubrow, to whom the director owes substantial spousal support and potentially more. Dubrow has a privacy invasion lawsuit pending against McTiernan. She alleges that McTiernan not only hired Pellicano to wiretap The Dark Knight producer Charles Roven, with whom McTiernan worked on the 2002 film Rollerball — the investigation of which sent McTiernan to jail) — she also alleges Pellicano also was hired to spy during her divorce proceedings. The case has been paused as a result of McTiernan's bankruptcy, but if she wins the lawsuit, she could potentially be owed millions. In the meantime, there's the owed spousal support. The judge has rejected some of her claims as untimely, but Dubrow says she has a general priority claim worth nearly $74,000. And she's supporting First Interstate's liquidation plan.
Together with its own creditor claim, First Interstate believes it has sufficient votes to ensure its liquidation plan is accepted by the judge. The bank says McTiernan's plan is "dead in the water." But McTiernan has apparently thrown up a roadblock by getting his own lawyers and other professionals working with him to also make claims on his estate. The bank is now accusing McTiernan of "improperly attempting to gerrymander voting."
U.S. Bankruptcy Court judge Cathleen Parker has declined McTiernan's request to put off the hearing tomorrow. As a result, the financial fate of a guy who was once Hollywood's biggest action director should be reaching its climax soon.