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Movie Producer Files "Private Bankruptcy"

Posted By admin || 21-Oct-2010

Movie Producer Files

"Sordid Lives" producer Stanley Brooks is liquidating his production companies in what's commonly known as a "private" bankruptcy or an "Assignment for the Benefit of Creditors."  His production companies owe $1.5 million in outstanding residuals to AFTRA.

Stanley Brooks is liquidating his companies after AFTRA did not accept his settlement offer for outstanding residuals on the 2008 Logo TV series Sordid Lives -- but not in the way the guilds and his creditors anticipated. Instead of going into federal court to file for bankruptcy protection, Brooks' companies, including his Once Upon a Time Films, have made an Assignment for the Benefit of Creditors, which is a kind of private bankruptcy in which a person called an "assignee" is appointed to take charge and distribute whatever proceeds are available to the outstanding creditors.

AFTRA is accusing the producer of filing a private bankruptcy in bad faith with the intention of not paying what's owed to the union.  But Brooks insists that the "private" bankruptcy is chosen because it will save money for the creditors by avoiding some of the expense of a traditional bankruptcy.  But one of the drawbacks of the private bankruptcy for creditors is that a certified debt does not have payment priority over other types of debs like it does in a traditional bankruptcy court. In anticipation of a traditional Chapter 7 bankruptcy , AFTRA had its $1.5 million debt certified in court; but the private bankruptcy filing has made it so that the union could possibly not receive nearly as much as it would get in a traditional bankruptcy filing.

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