BERLIN — Dutch bank ABN Amro has filed an insolvency suit against beleaguered German entertainment group Kinowelt Media.
ABN Amro put the claim on Kinowelt’s assets after the media company was unable to fulfill a $45 million loan payment due Nov. 28.
Kinowelt is desperate not to go bankrupt and said it is seeking a mutual solution with the bank. Company is also in talks with the Bavarian state government. Even so, Kinowelt admitted there was an “acute risk of insolvency.”
The move follows the cancellation of a $300 million TV package deal between Warners and Kinowelt (Daily Variety, Nov. 29).
The latest twist in Kinowelt’s saga came as the company posted a nine-month loss of $277 million, compared to a profit of $8 million in the same period last year. Sales were down 20% to $151 million.
While the return of the programming package to Warners has decreased Kinowelt’s need for future liquidity, the company is still burdened with high debt.
Kinowelt said it was hit hard by restructuring measures, continued difficulties with programming sales, and poor sales from its merchandizing biz.