John McTiernan's Prison Nightmare: 'Die Hard' Director Fights Foreclosure as He Plots Comeback

He's the only Hollywood figure incarcerated for a crime related to PI Anthony Pellicano. Now freed, the bankrupt helmer fights foreclosure on his ranch as court documents reveal his plan to make a comeback.
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John McTiernan

This story first appeared in the June 6 issue of The Hollywood Reporter magazine.

On Feb. 25, Die Hard director John McTiernan traded the confines of a South Dakota prison cell for his lush 3,254-acre ranch in the heart of Wyoming. But his stay there might not be for very long.

Court documents filed over the past few months and obtained by THR paint the broadest picture yet of the financial and personal impact the Anthony Pellicano wiretapping case has had on the only Hollywood luminary to go to prison for a crime associated with the former private investigator. (Pellicano himself was convicted of wiretapping in 2008 and still resides in a federal correctional facility in Texas.) McTiernan's lone residence, the ranch valued at $10 million, is in foreclosure and he has filed for bankruptcy protection, according to filings that detail dwindling cash reserves, huge legal fees and an installment agreement with the IRS to pay off tax debt. The documents also reveal that, at 63, the director is planning a big Hollywood comeback.

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McTiernan, who became an A-list action director in the late '80s and early '90s thanks to Die Hard and The Hunt for Red October and was commanding several million per film, spent 10 months in prison for lying to the FBI about hiring Pellicano to wiretap The Dark Knight producer Charles Roven, with whom McTiernan worked on the 2002 film Rollerball. The legal fight and subsequent incarceration hit McTiernan's pocketbook hard. Documents reveal that while in prison, he told wife Gail Sistrunk to take whatever steps necessary to save the Wyoming ranch as she was negotiating with First Interstate Bank to put off a sale. "Be fully prepared to use Chapter 11 if that settlement does not occur," McTiernan told his lawyer Ken McCartney from prison, according to the documents.

In 2013, after the McTiernans turned down an $8 million purchase offer on the ranch as too low, First Interstate foreclosed on the mortgage to collect about $5.6 million in loans that were partly used to improve the property (which sits on the Montana border and benefits from some of the most favorable tax laws in the U.S.).

In October, while in prison, McTiernan filed for Chapter 11 bankruptcy, which has upset the bank. In April, First Interstate described the filing as done in "bad faith," motivated solely to prevent a foreclosure. Additionally, the bank slammed McTiernan for "gross mismanagement of the estate" and demanded that the judge convert the case into Chapter 7, a much more drastic procedure that seeks to liquidate rather than rehabilitate the individual. That means McTiernan wouldn't have the chance to negotiate with creditors to alter the terms of the loan without having to sell off his assets.

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In Wyoming bankruptcy court, McTiernan's financial condition is detailed in depth. From films such as Die Hard: With a Vengeance, The Thomas Crown Affair and The Hunt for Red October, McTiernan receives about $235,000 per year in residuals -- a healthy sum for a director whose most successful work ended 15 years ago and who hasn't made a film since the John Travolta thriller Basic in 2003. But that total is not nearly enough to pay off nearly $6 million in liabilities. And that debt doesn't include a $5 million claim filed by two individuals who allegedly were harmed from a 2011 auto collision involving a vehicle driven by McTiernan. There's also a trial scheduled for December in Los Angeles in an 8-year-old lawsuit in which McTiernan's ex-wife Donna Dubrow claims she was wiretapped by Pellicano during divorce proceedings, though the bankruptcy proceedings likely will delay that trial.

McTiernan and his agents at Paradigm declined to comment on his situation or his plans to return to directing, but court documents and other sources show that new moneymaking schemes are afoot.

For starters, a local community board posting describes McTiernan as having cleaned out five barns' worth of belongings, including movie memorabilia, acres of art, vehicles and precious heirlooms for "the biggest benefit estate sale in Wyoming history," set for July 14. (He is charging a $10 entrance fee.)

McTiernan also is lashing back at the bank for its allegedly rash attempt to liquidate him, and in doing so he is making big claims about his ability to restart his directing career. On May 7, McTiernan's attorneys told the bankruptcy judge that no one expects residuals to provide the basis for paying off debt. Further, the bank did not loan him $5.5 million because of his ranching expertise. Instead, "the loan was made because John McTiernan makes movies and has made some really well-received movies and enjoyed as recently as 2011, multimillion dollar annual income as a result," states an objection to the bank's motion.

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McTiernan's legal team points out that now that he's out of prison, he can get back to his bread-and-butter livelihood. And he fully expects Hollywood will have him back.

"What the debtor has done, and what is clearly an unusual circumstance, is dived back into the movie business," McTiernan's lawyers told the judge, promising soon to describe the "unusual activities" that would mean a "potential cash flow" that would exceed the interest on the bank loans several times over.

The clock is ticking on that promise. An evidentiary hearing in the bankruptcy case has been scheduled for July 8, putting McTiernan under the gun to make progress on whatever projects he's cooking up. McTiernan already has been attached to Red Squad, a potential film rumored to star Nicolas Cage about DEA mercenaries taking out a Mexican drug cartel. In addition, he told Empire magazine in April that, in prison, he penned a follow-up to The Thomas Crown Affair titled Thomas Crown and the Missing Lioness. As for other potential projects, his reps remain tight-lipped.

Can ex-convict No. 43029-112 make a Hollywood comeback and save himself from liquidation? He's certainly got industry supporters, such as Samuel L. Jackson, Alec Baldwin and director Brad Bird, all of whom supported a "Free John McTiernan" Facebook page. McTiernan also claimed when he was released that he will work to have the felony conviction reversed. As he pursues his second act, a bankruptcy judge, a bank, an ex-wife and others are watching closely.