Exasperated video vendors seeking payment have threatened to file involuntary bankruptcy against MGM/Pathe, sources say, while doubt about the company’s solvency is being tempered by an anticipated infusion of cash from Europe.
In a reportedly unrelated move, Bernie Vanderfin, senior v.p., finance and accounting, disclosed last week that he will leave the company’s distribution arm March 1. Vanderfin, who oversaw vendor accounts – many of which were overdue – characterized his exit as amicable.
Vanderfin said he is in contact with about 30 vendors daily, and insists that “we have the intention of paying them in full.”
Despite recent payments and settlement agreements with some vendors, others are continuing to threaten legal action, including involuntary bankruptcy action against MGM/Pathe, per sources.
One vendor who asked not to be identified said he is owed close to $250,000 and has told his attorney “to do the most extreme thing.” He claimed to have had a payment agreement, “but the deal was rescinded” by MGM/Pathe.
Another vendor reportedly is owed about $600,000, though that figure was not confirmed.
Through this before’
MGM/Pathe spokesman Craig Parsons said he knew nothing about threats of involuntary bankruptcy by vendors. “I can only say that all of these problems are being cleared up,” he commented. “We’ve been through this before.”
Last month, the company bounced a six-figure check to Dustin Hoffman and was reportedly late in payments to Sylvester Stallone and producer Irwin Winkler. Pathe said it has cleared up the payment problems.
Parsons offered no comment on speculation that the company may not survive the year. Nor would he remark on rumors of more money coming from Credit Lyonnais or a European investor.
Still, word of extra cash and Pathe’s promises haven’t silenced displeased vendors, and insiders say they have seen letters of threatened bankruptcy filings.
Several of MGM/Pathe’s vid vendors have been paid in full since Warner Home Video stepped in as servicing agent.
Warner took over sales and distribution of the MGM/UA line Nov. 15 and will handle day-to-day laserdisk operations, subject to MGM/UA approval.