Aviron Pictures Imploding As Layoffs & Lawsuits Cloud Future On Eve Of Sundance

Aviron Pictures Imploding As Layoffs & Lawsuits Cloud Future On Eve Of Sundance

January 23, 2020

EXCLUSIVE: As we step foot on the ground at the Sundance Film Festival today, we’ve confirmed that 12 people of the near 30-person staff at Aviron Pictures were pinkslipped on Friday and issued their final paychecks. Domestic theatrical distribution president Greg Forston and his team were eliminated, in addition to EVP Publicity and Promotion Claire Heath.

This melee comes in the wake of BlackRock, Aviron’s senior lender, alleging impropriety in the company’s structure in a contentious lawsuit that was filed December 17 in the Supreme Court of New York (read it here), specifically accusing the company’s founder and owner William Sadleir of forgery and fraud. This resulted in Sadleir being removed by BlackRock as the operating manager of his company’s subsidiary Aviron Pictures as well as other arms of his company.

At this point in time sources inform us that Sadleir is prepping a defense, and counter-claims against these accusations.

In Sadleir’s place at Aviron Pictures, I’m told that BlackRock installed an independent manager who will attempt to correct the distributor’s wrongs, and that’s John Farrace of SierraConstellation partners, a firm that is involved in company reorganizations, and assesses what the next step will be in these turbulent financial situations. I hear that there are some key Aviron executives that survived on Friday including President David Dinerstein, EVP of Acquisitions Jason Resnick, Head of Business Affairs Louis Spoto and EVP of Media Strategy and Content Distribution Francois Martin who are working with Farrace on hopes of a renewed business model.

Aviron insiders provided no comment when reached about this story.

It is not clear at this time whether Aviron’s unreleased titles will be auctioned, whether Chapter 11 will be filed, or if a new company will be spawned with the same management team. We’ll see how this all plays out.

Sadleir told us on the record in an email dated Jan. 8 regarding his removal from Aviron Pictures by BlackRock: “I am in the process of closing a substantial financing that will allow Aviron (or at least most of its management team, possibly under a new banner) to continue as an independent domestic producer and global distributor of feature-length commercial films, without any further reliance on BlackRock as its only capital source.” The hope here is to continue to supply big exhibition with mid-budget movies targeted at specific demos. Sadleir also informed us earlier this month that while he was replaced as the head of Aviron Pictures, he remains the owner of the umbrella company Aviron Group through a family trust. Also, Sadleir says he remains the Manager of Aviron Finance and Aviron Licensing.

We had also been hearing for some time that BlackRock was looking to get out of the independent film space and to focus more within the mergers and acquisitions sphere of the entertainment industry.

There’s more.

For those not in the know, former 20th Century Fox Co-President of Global Theatrical Marketing & Distribution Tomas Jegeus who was named CEO in July, left the post on Nov. 6 last year and recently filed a suit on Jan. 13 against Aviron Pictures and Sadleir claiming that the latter “had not paid Jegeus one penny of his $250,000 signing bonus or his ($1M annual) regular salary.”

READ MORE on Jegeus’ suit here.

Jegeus’ plan was to expand Aviron into streaming and foreign distribution as well original content productions, so that the distrib could reap monies they were leaving on the table.

I hear that Aviron staff and key brass were blindsided and shocked by the claims made in BlackRock’s lawsuit and weren’t privy to such alleged misdeeds. At the same time, there’s great upset having been made grand promises of capitalization (which the Jegeus suit details).  Aviron began with great intentions of becoming another distributor of mid-budget fare like Annapurna, STX, and Lionsgate. Their first title out of the gate in the summer of 2017 was solid –the Halle Berry thriller Kidnap , which made close to $31M at the domestic box office, a title that Aviron saved from Relativity’s bonfire.

Prior to Kidnap, Aviron was being tapped by Byron Allen’s Entertainment Studios to handle the marketing campaign on his Mandy Moore shark movie 47 Meters Down which was a big hit for him earning $44.3M (Allen saved that movie’s theatrical fate from the Weinstein Co. which was set to dump it straight to video). Confidence was high for about two years that an under-30 person staff at Aviron could tackle wide 2,5K-3k wide releases and be competitive. Another profitable pic for Aviron was the 2018 horror sequel Strangers: Prey at Night which made over $24.5M.

However last year at Sundance, the writing was on the wall for this young film distribution studio of independent and wide releases after they renegged on the promised P&A spend for the Anne Hathaway and Matthew McConaughey movie Serenity which tanked stateside with $8.5M. Largely this was because the company was under-capitalized, however, Aviron issued a statement saying that they had to curb their marketing spend due to the pic’s poor test scores and critical reaction (the pic logged a 20% Rotten Tomatoes score).

Further calamity ensued last spring when those close to the production of After, a feature adaptation of the popular Anna Todd YA novel which Aviron released, were upset over the distributor not marketing the film stateside with a lackluster $12.1M domestic result, despite raking in an overseas gross of $57.4M.  After Productions sued Aviron claiming that the distributor failed to market the movie stateside after foreign distributors made the project work. The production company also claimed that they weren’t paid the remaining balance on their $3.15 minimum guarantee.

Another losing 856 theater release for Aviron was the Rosamund Pike drama A Private War about war correspondent Marie Colvin who covered civil wars in some of the most dangerous countries. The movie earned two Golden Globe noms for Pike’s performance in the actress category and a best song nom for Annie Lennox’s single “Requiem for a Private War”, however, the pic crashed at the domestic B.O. making only $1.6M.

Some highlights of the BlackRock suit accuse Aviron Entities of “purporting to sell or otherwise finance several of the motion picture rights or related receivables that were pledged as collateral to the BlackRock Fund. BlackRock never authorized or consented to these filings, nor authorized or consented to these recent sales of collateral.”

 

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