3:16pm PT by Eriq Gardner
The Worldview Drama: Raising Money for Films By Promising Acting Roles
The unraveling of Worldview Entertainment, the film-financing company behind Oscar best-picture winner Birdman, has so far delivered an inside look into the pitfalls of Wall Street veterans raising hundreds of millions of dollars for dozens of films. The company's key players are currently facing off against each other in a dizzying array of litigation examining what went wrong.
Now, Worldview's problems have exposed a practice described by insiders as shockingly common and perfectly legal, if potentially troublesome — film investment deals that are supposed to deliver acting gigs for the family and friends of the investors.
This week, former Worldview CEO Christopher Woodrow went to court to halt an arbitration initiated by Parnassus Enterprises, a firm that put up $2 million for Worldview's slate of films.
Parnassus now claims that it was induced to put up the money by fraud, and among the contracts in dispute is a letter agreement signed by Woodrow and addressed to Parnassus and David Randall.
In the letter, acknowledged by Woodrow as "binding and enforceable," he provides "confirmation that the investment would confer countervailing career opportunities for the actress Adriana Lena Randall."
Specifically, it's guaranteed that Adriana will get one co-producer credit, two associate producer credits, two roles in films produced by Worldview and/or its production partners, the opportunity to audition for four more films, and introductions and referrals to "various strategically positioned individuals or organizations within the film and talent industry."
Andrew Hurwitz, a partner at Frankfurt Kurnit who isn't involved in this dispute but has handled a lot of financing in the independent film world, doesn't believe this arrangement is illegal per se. There are codes that agents must be licensed and small legal measures aiming to crack down on upfront fees for representation, but the Randall pact likely falls inside the boundaries of a square deal. Hurwitz says he's encountered such arrangements in the past, but says the biggest problems arise when the terms are vague.
In this instance, Woodrow said in the letter that he couldn't provide guaranteed casting in The Intern, The Outsider and Blonde — co-productions with major studios that Adriana indicated interest in performing — but rather carefully stated Worldview "will target" roles in those films plus Beyond the Green Inferno and the Statistical Probability of Love at First Sight. Even then, Woodrow cited the "fluid nature of projects" and held back on promising her a specific role. The letter then added, "Should any of these specific films or roles become no longer available as options, Worldview guarantees to Adriana within two years of the date of this letter the same caliber role(s) in similar quality, commercially viable films with Adriana's approval."
According to William Briggs, the attorney at Venable representing Parnassus, she never got the promised roles.
This deal represents a small, if curious, element of the claims being made against Worldview. The larger picture is the representations that Worldview officials made in the course of raising money and how they then deployed those funds.
According to Parnassus, its $2 million was supposed to be held in escrow with the deal only closing once $30 million was raised in total from other investors for a slate of about 10 films. Worldview only raised $18 million, says the legal papers, but instead of returning the money, "Worldview went rogue and purportedly 'invested' Parnassus' capital in a certain slate of motion pictures. Worse, Worldview immediately paid its principals an exorbitant fee of 10% of the gross budget for each motion picture in which it invested without authorization."
All of this would probably would never have come to light if Woodrow wasn't forced out of Worldview. It would have likely remained private in arbitration. But since he's been named as one of the respondents by Parnassus, he's disputing that he's beholden to any agreement to arbitrate and denying personal responsibility for the corporate affairs of Worldview.