Film-finance world is in danger due to financial turmoil

September 16, 2008 · By ProfitEdition News Filed Under Features

Chapter 11 bankruptcy filing by Lehman Bros. and the projected sale of Merrill Lynch by Bank of America though not effecting film finance world in recent times but according to analysts it is likely to face difficulties emerging from global financial turmoil.

On Monday film-finance legal representative John Burke stated that these financial market crises are not good for industry in so many ways.

For the coming shorter period the studios and startups that have made use of funds from institutions like Merrill Lynch, have save money with interest rates. Many of them have already fixed rates like Summit Entertainment and Marvel Studios that have credit facilities with Merrill.

But now with the float of time some of these companies could see gloomy future when the Merrill sale goes through.

High-ranking film executive stated that Merrill’s new owner Bank of America will have teams of accountants who will search for every possible loophole and escape door from the deal to avoid and get rid of any risky investment.

It is expected that this new owner reject or turn down existing deals to carry on further.

Even if the bank is not ready to invest directly in a film they were accountable for investing in and financing money to high net-worth individuals and hedge funds, who sequentially put their money into single-picture movie financing.

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