Golin sues Kinowelt

U.S. producer cites breach of contract

CANNES — The only big news out of Germany these days is who is suing who.

Steve Golin’s production entity Overt Operations said Wednesday it had filed for breach of contract against Kinowelt USA, the U.S. subsidiary of the German indie Kinowelt Medien, over a development, production and distribution agreement that Golin contends the companies entered into in October.

The suit was filed in the Los Angeles Superior Court and seeks unspecified damages and an acknowledgement that the agreement exists.

Golin asserts that the two companies were operating under a second-look agreement starting in October 2000. According to the lawsuit, Kinowelt reneged on the deal in April, saying that there was a “substantial gap” that was “too wide to be bridged.”

According to Kinowelt, the two companies never concluded the agreement.

“We couldn’t agree on some material points,” Kinowelt U.S. honcho Chris Sievernich told Daily Variety. “Our agreement required a fully negotiated and executed agreement. We couldn’t come to terms. The negotiations took a very long time and we decided in early April to terminate the negotiations. We really respect Steve as a producer and are surprised he has chosen this route.”

No deal was ever announced, which, as Kinowelt is a listed company, would have to follow immediately upon the signing of an agreement. Golin refers to a handshake accord.

“I am disappointed to have to resort to a lawsuit,” said Golin. “In all of my time in the business I have never seen anyone behave so dishonorably as Rainer and Michael Koelmel, Chris Sievernich and Tom Garvin. They obviously don’t realize that in this town when you shake hands, it means you have a deal, irrespective of your falling stock prices.”

Golin asserts that the parties had a “binding and enforceable” agreement and that the situation led him to give up the opportunity to enter into “other, lucrative deals.”

He asserts further that the “real reason” for the alleged breach is financial problems, which Golin contends that Kinowelt is facing.

“These allegations are unfounded,” said Sievernich referring to Golin’s statement that the breach is “due to financial problems suffered by Kinowelt parent company Kinowelt Medien, including a sharp decline in its stock as well as media reports that German security regulators were looking into allegations of illegal insider trading.”

“They are pure speculation,” Sievernich said. “The fact is that we couldn’t come to terms and terminated the negotiations.”

There is growing speculation surrounding the German indie’s financial health and ability to keep up its commitments.

Kinowelt Medien has yet to complete an agreement announced last year to take a 50% stake in the U.K. distribution company Momentum Pictures.

Like the majority of Neuer Markt-listed companies, Kinowelt is suffering the fact that low stock prices mean that no fresh equity can be raised.

Suit is the latest in a wave of claims filed against Germany’s Neuer Markt film players.

Earlier this month, Starlight Film Prods, a subsidiary of VCL Communications, filed a $4.5 million suit against VCL for allegedly failing to meet certain promises. VCL said the claims were unsubstantiated.

Another lawsuit between German licensing player Intertainment and Elie Samaha’s Franchise Pictures is ongoing, while a case is being fought out between Advanced Medien and Maxx Films over alleged breach of contract and monies owed.

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