Sale leaves Canadian films in limbo

A group of independent Canadian filmmakers - frustrated because their movies aren't being released after ThinkFilm was sold to an American - have retained lawyers to try to get their pictures out of the Toronto-based distributor's clutches.

The filmmakers say the issue isn't just their movies aren't being seen, but government rules mean their funding could be in jeopardy.

At risk are about 50 Canadian-made titles, including Michael Mabbott's Citizen Duane and Everything's Gone Green from director Paul Fox and writer Douglas Coupland - films that basically have been left in distribution limbo since ThinkFilm was sold last October to Los Angeles entrepreneur and producer David Bergstein.

"I've written four letters to ThinkFilm demanding they release their distribution agreements to Canadian filmmakers/producers since ThinkFilm is no longer Canadian-owned," said David Steinberg, a partner at Heenan Blaikie. "I'm not feeling all that confident right now because there has been no [formal]response." His firm represents three producers, Darius Films Inc. (with two ThinkFilm titles, Hank and Mike and Weirdsville), Alchemist Entertainment ( King of Sorrow) and a third, unnamed client.

On Saltspring Island, B.C., True West Films founder Elizabeth Yake has also sought legal counsel to figure out how to get back the distribution rights to her buzzed-about comedy, Everything's Gone Green.

What's gone awry at ThinkFilm - and got the producers' collective back up - is the fact that it is now a U.S.-owned company, which means it cannot, under Canadian law, distribute domestic titles here.

When ThinkFilm was sold in October, company president Jeff Sackman anticipated that he would sell off his Canadian titles in a month. The deal never materialized.

It's now almost February, and still there is no word on what will happen with ThinkFilm's Canadian library.

"Producers are afraid of suffering significant financial damage by losing their Canadian content certification," Steinberg said yesterday.

"The producers have been stuck in a holding pattern. When ThinkFilm was sold to a foreign buyer, they were assured it would all work out, that they wouldn't get screwed here. But now, time is becoming an issue, and they're still stuck. People are getting more worried and nervous every day that goes by."

The Canadian-content certification is required before filmmakers get lucrative tax credits and bridge financing from banks.

Toronto producer Nicholas Tabarrok, whose Darius Films has Weirdsville (finished and screening at Slam Dance Film Festival in Park City, Utah) and Hank and Mike (just being prepped) on the hook at ThinkFilm, says a clawback on tax credits and other bridge financing "would be a huge financial hit for me - many times over." Then he adds, "But I can't see ThinkFilm letting it go that far.

"I couldn't make either film without Telefilm or tax credits. I'm dealing with ThinkFilm employees here in Toronto who are trying their best. I assume [Bergstein]has to be aware, [but]being American he has no vested interest in the Canadian industry, so I suppose that's not his highest priority."

The situation at ThinkFilm means Everything's Gone Green probably won't now have distribution in Canada. "It's too late," explains Yake, who says no Canadian distributor could ramp up fast enough to meet the film's U.S. distribution debut, earmarked for early spring.

"So here we are, sitting ready to release our film on April 13, and the film's not going to be released here in Canada. So we lose that critical mass of publicity from the press machine," said Yake, who signed in the States with distributor Independent Pictures ( The Blair Witch Project) and also secured a movie soundtrack with Lakeshore Records ( Little Miss Sunshine and Mr. & Mrs. Smith).

"It's just a pity. We're proud we're the first Canadian picture that Lakeshore has picked up for a soundtrack. It's all Canadian. And the Canadian-distribution component is missing. It's a letdown. It would have been really great if we had had the opportunity to do a little damage control before everything came down."

In November, Sackman told the entertainment trade publication Playback: "Somehow or other we'll work in conjunction with the producers to make sure that everything that's required [to get these films released]will occur." Yesterday, he did not return calls.

Any Canadian film (whether released or not) is at risk of losing its Canadian certification. In the Canadian Audio-Visual Certification Office's producer-control guidelines, it is specified that the Canadian distribution rights must be owned and controlled by a Canadian-controlled company for 25 years (from the time the production has been completed). Therefore, any Canadian-content film could be affected by the sale of ThinkFilm to an American owner.

And Telefilm, which has roughly a dozen titles under the ThinkFilm banner, is not too happy, either.

Dan Lyon, Telefilm's feature film unit director, said the longer the issue "is unresolved, the more likely it is that Telefilm and other government agencies, as well as banks, will be forced to take action."

Lyon quickly adds that it's the last thing Telefilm wants to do. "We will try to avoid disaster situations ... but there are a whole bunch of regulatory requirements that are in jeopardy here," he says.

"We have to figure out something to do. We don't want to put any producers into default. We'll work long and hard to find other alternatives before that has to kick in." (All Canadian Feature Film Fund money is premised on films being produced and distributed by Canadian distributors within 24 months.)

ThinkFilm was actively seeking a buyer since last spring. And several homegrown distributors were interested in the Canadian library, including Toronto's Maple Pictures, Montreal's TVA Films.

But ThinkFilm's focus of late seems to be on the high-profile acquisition of worldwide rights to documentaries such as War/Dance and Zoo, both premiering at 2007's Sundance Festival this week.

A few years ago, ThinkFilm won an Oscar for Born Into Brothels: Calcutta's Red Light Kids, and was again nominated for an Oscar for Murderball. Recently, the company has also been basking in praise over its film Half Nelson.