Thursday, March 10, 2011

Magma Creditors' Meeting

Over 70 creditors are likely to attend a meeting at the Salthill Hotel at 9am on March 18 to hear the full extent of the financial difficulties at Magma European Scripting House Ltd.

A liquidator is likely to be appointed to the company which is the umbrella company for Magma Films' operations in Galway. The most recent accounts filed for the company, in March 2009, are for the year ending December 31, 2007.

It remains to be seen if the financial difficulties will affect any of the associated companies' ongoing involvement in television and film projects such as the Jack Taylor Bruen adaptations, and the planned €7m Niko sequel on which Magma is slated to be a co-producer.

Update - March 12
An Anonymous commenter says - Me thinks you know more. Do scriptwriters write on credit and show up looking for 10 cents on the euro? Or is something more strategic afoot?

Dear Anonymous,
No, I wouldn't claim to know any more than that. I had heard rumours of money being owed and chased on a Magma project in recent times but that wouldn't be uncommon in Irish production from time to time.

I wouldn't claim to know what the exact financial relationship is between Magma European Scripting House Ltd and the other companies or businesses with 'Magma' in their title - MAGMA EIRE TEORANTA, MAGMA EUROPEAN HOLDINGS LIMITED, MAGMA FILMS, MAGMA PRODUCTIONS LIMITED.

Nor do I know if there is such a relationship with other companies sharing the same address, among them - ULYSSES FILMS LIMITED, ULYSSES MUSIC PUBLISHING LIMITED, PICTORION SOUND AND VISION LIMITED, or LAKESIDE FILM PRODUCTIONS LIMITED.

Then there are other companies outside the jurisdiction like Ulysses Films NI Ltd in Belfast, Ulysses Film Produktion and Pictorion Magma Animation in Hamburg, and Molten Rock Media GmbH in Bremen that may have some financial relationship, shared directors or co-production roles with Magma companies.

For instance, the Bremen company may be a German vehicle for Magma productions such as the series of Jack Taylor adaptations of Ken Bruen's crime novels. See and and

What I can say, as a general observation, is that when film and television production companies collapse, often owing considerable sums of money, the companies' viable projects tend to remain in the beneficial control or ownership of the companies' directors.

These folks then establish new production vehicles for those projects and public funding agencies generally permit or facilitate this to happen. This certainly appeared to happen when Little Bird was wound up and some of their projects in development with the Irish Film Board resurfaced with West Park West (Horses), Caveman (All Good Children) and Soho Moon (Killing Tom and Death and Nightingales).

I cannot say whether such practices are 'strategic' or not. Timing would be a factor, as would be the status of separate development vehicle company(ies), where they exist, because they might not be in financial difficulties.

To give an example of some of the complexities in this area - 'Magma Films' was offered a €150,000 production loan for the sequel Niko: A Family Affair by the Film Board last December (but published only recently). 'Magma Films' is a business name rather than a limited company, although it may be the common usage for Magma's Galway operations. It is not clear which of the companies in the group actually uses it as a trading name or whether that company is in any difficulties.

It does seem to me that viable, developed projects would be considered company assets (like R&D materials) in other lines of business, and would be disposed of on the open market as part of the effort to meet all the company's or group of companies' outstanding liabilities.

A lot might depend on the view a liquidator might take of inter-company and directors' loans within a group of companies - whether these were actual cash transactions or a nominal value that was placed on services provided. And then the question of preferential creditors arises.


Anonymous said...

Me thinks you know more. Do scriptwriters write on credit and show up looking for 10 cents on the euro? Or is something more strategic afoot?

irish film portal said...

See update to the post.