Koelmel charged

Teutonic distrib accused of embezzlement

BERLIN — Kinowelt exec Michael Koelmel was charged with 15 counts of embezzlement Monday in connection with the 2001 insolvency of the distribution/production company he founded with brother Rainer.

Although the brothers managed to resurrect Kinowelt last year, prosecutors have been probing Michael Koelmel’s activities, nearly derailing the siblings’ $32 million takeover bid for the insolvent company last year.

The Munich District Attorney’s Office alleges Koelmel misappropriated E25 million ($32 million) and impeded the insolvency proceedings.

Koelmel denied wrongdoing and said he will be found innocent if the case goes to trial. “If the charges were true, Kinowelt’s creditors would never have accepted our bid to buy back the company.”

$19 million question

The main thrust of the prosecutors’ case against Koelmel revolves around $19 million they contend Koelmel illegally transferred from Kinowelt to the brothers’ sports rights business, Sportwelt, before Kinowelt’s bankruptcy.

According to one Kinowelt insider, business dealings before the bankruptcy are damning either way: “On the one hand, they had to pay their bills, but any payments made before the insolvency look suspicious to prosecutors.”

Kinowelt, which grew massively during the Neuer Markt’s heyday, began to collapse after a number of major film and sports rights investments failed to turn a profit.

The Koelmels moved Kinowelt’s headquarters from Munich to Leipzig last year after reacquiring the company’s core assets — which include theatrical and home entertainment distribution divisions as well as a production unit — with the help of local state-owned bank Sparkasse Leipzig.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Biz News from Variety