NSB Film Corp., in an attempt to assuage its numerous creditors, has settled a year-old lawsuit against Credit Lyonnais Bank Nederland, officials of the bank and Hollywood’s top three talent guilds said Thursday.
The suit had charged the bank with fraud, racketeering and contributing to the ultimate bankruptcy of NSB, then known as Hemdale Film Corp.
Officials for MCEG Sterling Administrations, the agent overseeing the bankruptcy, claimed the company’s case was “not sufficiently viable” to pursue.
The settlement gives NSB a chance to develop a plan of reorganization and to pursue litigation against former Hemdale chairman John Daly and former prexy Derek Gibson for allegedly misappropriating the rights to several of the company’s film and music properties. A spokesman said those properties could be worth millions of dollars.
NSB then plans to fully reorganize under Chapter 11 to allow principal secured creditors — Credit Lyonnais Bank, the Writers Guild of America, the Directors Guild of America and the Screen Actors Guild — as well as some unsecured creditors to divide the remaining estate.
The company is in Chapter 11 under court-appointed CEO John Hyde and MCEG.
Credit Lyonnais and the guilds heralded the settlement as the first step to recovering some $ 98.5 million in assets they are collectively owed. The DGA, WGA and SAG stand to recover some $ 8.5 million, thought to be owed for residuals on pix.
DGA western exec secretary Warren Adler said the accord allows the guilds to move forward toward “maximum recovery for the estate and its creditors.”
Hemdale went into voluntary bankruptcy in October 1992. The company had a library of 178 titles.
“This settlement enables an equitable sharing arrangement” among the guilds and the bank, said Ann Jacobus, chief operating officer of MCEG Sterling.
The settlement and bankruptcy does not involve Hemdale Entertainment.