Ivan Reitman and Tom Pollock’s Montecito Picture Co. has settled its dispute with Universal Pictures.
Under the terms of the agreement, which was expected (Daily Variety, Feb. 17), Reitman and Pollock have acquired Polygram Filmed Entertainment’s one-third interest in Montecito, making the filmmakers equal partners in the company. (U acquired PFE last year.)
Montecito, which despite published reports will not be transferring its production deal to Universal, also retains ownership of its 16 film development projects.
Montecito originally pacted with PFE in February 1998 to make three-five films a year. Montecito had raised $300 million of its own financing from Citibank, which PFE pledged to match.
That arrangement ran into trouble when U acquired PFE, as part of its $10.26 billion Polygram Holdings acquisition, before the PFE/Montecito deal was closed. Although U kept funding Montecito’s overhead through the beginning of this year, the studio felt that ponying up the $300 million didn’t necessarily make good business sense.
Neither Reitman nor Pollock would comment on the terms of the settlement, but it is understood that Universal has transferred PFE’s 33% stake in Montecito to the two partners and paid them a lump sum in compensation, which they will use to help capitalize the company. While the size of the settlement was not disclosed, it is thought to run into the tens of millions, enough to keep Montecito in business.
Needs new financing, distrib
Montecito’s Citibank facility has now fallen through, and Pollock said that he and Reitman would work to set up a new arrangement, as well as a new studio distribution deal.
“I am delighted that we have worked this matter out with Polygram and Universal to our mutual satisfaction,” Pollock said. “Our company leaves with sufficient capitalization to complete its development program and to establish itself as an independent production company.”
One of the ironies of the contention between Montecito and U was that Pollock is a former vice chairman of Universal Pictures. Reitman’s former entity, Northern Lights Entertainment, also previously had a production deal with U.
Montecito was repped by attorney Bert Fields in the negotiations.