Film & TV Insolvency Law and Financial Distress

The creative industries are defined by passion and high-risk investment. When a film or television project faces financial distress or insolvency, the situation is often complicated by unique assets like Intellectual Property (IP), cross-border financing, and specialised secured creditors.

Our firm provides expert legal counsel to navigate the unique challenges of insolvency within the film and media landscape, protecting the interests of producers, distributors, financiers, and secured creditors.

Why Film Insolvency is Different

Unlike a standard corporate liquidation, film projects involve critical, time-sensitive assets that must be protected:

• Intellectual Property (IP): The script, underlying rights, music, and final cut (the Negative/Masters) are the primary assets. The key challenge is preserving the "Chain of Title" and ensuring IP rights are correctly held and secured against production financing.

• Secured Finance: Film financing often involves complex security packages, including security interests over the film's IP, future revenues, distribution agreements (pre-sales), and often a Collection Account Management Agreement (CAMA). These need expert assessment in an insolvency scenario.

• Completion Guarantees: The role and liability of the Completion Guarantor (or Bond Company) are central. Their involvement often dictates the procedure when a production goes over budget or faces a standstill.

• Multi-Jurisdictional Issues: Film financing and distribution are often international, meaning insolvency proceedings may involve laws across multiple territories.

Our Core Insolvency Services for Film Clients

We offer proactive and reactive solutions for all parties involved in a troubled film project:

1. Risk Mitigation and Proactive Planning (Pre-Insolvency)

The best defence is a strong financial and legal structure. We advise on:

• Security Documentation: Drafting robust Loan and Security Agreements, Inter-Creditor Agreements, and Collection Account Management Agreements (CAMAs) to ensure a financier's priority is protected in a worst-case scenario.

• Completion Bond Documentation: Reviewing and negotiating the terms of the Completion Guarantee to understand the triggers for the guarantor's takeover and the rights of the investors/lenders.

• "Safe Harbour" Strategies (for Directors): Advising directors and producers on their duties to prevent Insolvent Trading and utilising statutory protections (like "Safe Harbour" provisions) to restructure operations and maximise the company's chances of recovery outside of formal insolvency.

2. Crisis Management and Restructuring (Distress)

When a project is in imminent financial danger, swift action is required.

• Voluntary Administration / Restructuring: Assisting production companies to appoint an administrator to quickly assess the business viability and propose a Deed of Company Arrangement (DOCA) to creditors, often the only way to save a project mid-production.

• Negotiation with Secured Creditors: Representing the production company or junior financiers in critical negotiations with the senior lender, completion guarantor, and other secured parties regarding the project's assets and continuation.

• Debt for Equity Swaps: Structuring arrangements where creditors convert outstanding debt (e.g., deferrals, supplier invoices) into equity in the project's profits.

3. Insolvency Proceedings (Liquidation / Receivership)

Representing stakeholders during formal insolvency procedures:

• Asset Recovery & Sale: Advising Insolvency Practitioners (Liquidators/Receivers) on the unique process of realising value from film assets, including:

  • Selling the film library or catalog.

  • Selling the rights to the Masters/Negative to recoup debts.

  • Managing the complex chain of distribution and recoupment rights in a CAMA.

• Voidable Transactions: Pursuing or defending claims related to unfair preferences, unreasonable director-related transactions, or uncommercial transactions that may be challenged by the liquidator.

• Director Liability: Providing legal defence and advice to directors facing claims for breaches of duty or insolvent trading.