EXCLUSIVE: I began hearing rumors from sources yesterday that The Film Department had laid off its entire staff. Today, I can confirm that it’s a very sad day for that 3-year-old company that financed and produced the hit film Law-Abiding Citizen: it will close as of May 27th. Here’s what happened in summary to Chairman/CEO Mark Gill and Vice Chairman/COO Neil Sacker: Though the company was profitable in 2010 and generated $90 Million in revenues in the last 18 months, The Film Department was not allowed to keep it due to lender stipulations forced upon the company during the credit crisis. So all that money went to lenders. When the company had become profitable and improved its balance sheet by more than $105 million in the last year, it sought to raise $200 million in new private equity and debt to become a U.S. film distributor as well as a financier/producer. But it was unable to close its recapitalization in challenging capital markets.
“What if you made $90 million and your banks wouldn’t let you keep it? Basically, that’s what happened to us,” Mark Gill, Chairman and CEO of The Film Department, said in an exclusive statement to me. “We managed to hold on in this impossible position for 15 months, but we couldn’t survive indefinitely.”
“We came within inches of closing our recapitalization on three occasions, but unfortunately close isn’t good enough,” Neil Sacker, Vice Chairman and COO of the company, said in an exclusive statement to me. “We’re grateful to everyone—filmmakers, talent, financiers, industry experts and our staff—who contributed considerable time, effort, expertise and capital to the company.” (more…)