Imagine this:
You are in a court room. You sit opposite the men who once shook your hand as you signed over all rights to your film in exchange for distribution. They told you they'd take care of you and your film. Everyone would make money. Now, these men cannot look you in the eyes as your lawyer questions them in a bankruptcy hearing.
Your lawyer asks where the titles are located. You hear the words, "Vivendi Universal and Warner Brothers." These were the big studio names that were dropped when you decided to sign a distribution deal. You thought, "How can I go wrong with Universal and Warner Bros.?" Now one or more of these studios owns all rights to your film. You remember the words, "Your film is going to do well in direct-to-DVD and video-on-demand."
Your lawyer asks the men another question. You hear the answer and squirm. You grit your teeth. Anger boils inside of you. Yes, your film made money. It apparently grossed $800,000 in DVD sales and video-on-demand. Unfortunately, you've seen exactly zero dollars. Now the men who promised you the world are closing up shop. They've filed for bankruptcy. You may never see a dime of that money, but what's even worse, you may never see your film again.
The above scenario is the greatest fear of independent filmmakers all over the world. Hungry for distribution and wide-eyed with the dream of seeing one's film in Blockbuster, filmmakers sign away their films. They hope beyond hope that the independent distributors they've signed with are indeed legit. They pray the math adds up. They pray they don't lose everything. For several filmmakers who signed with Polychrome Pictures, this fear is now their reality. The dream has become a nightmare.
Polychrome Pictures filed for bankruptcy in November 2009. This act was preceded by at least one judgment against the company for breach of contract in small claims court. The bankruptcy case has become yet another cautionary tale for independent filmmakers looking for traditional distribution.
Polychrome Pictures was formed by Eugene Taylor and Arnold Holland during a joint venture with BellaVic LLC and Lightyear in 2004. According to a transcript of the bankruptcy proceedings held in January, Polychrome Pictures had a licensing deal with Vivendi Universal and InDemand (VOD). Operating capital came from a secured loan from National Bank in excess of $300,000. In 2007, Polychrome grossed more than $2.8 million.
However, according to the documents filed by Polychrome, and the testimony of Eugene Taylor, Polychrome paid its principals $60,000 total for 2008 and 2009, combined. Polychrome has not filed tax returns since 2007.
Also, according to Eugene Taylor's testimony, Polychrome has 500,000 units (DVDs) sitting in a warehouse at Vivendi Universal. These units represent the duplicated masters of the films Polychrome is contractually obligated to distribute. When put in the perspective of the filmmakers seeking to recoup their losses (or their films), 500,000 painfully represents the number of ready-to-ship DVDs that are not sitting on a self at Blockbuster or Walmart ready to be purchased.
Several films and entities were represented at the bankruptcy hearings in January. Stompin', Kisses and Caroms (this filmmaker also alleges that Polychrome mishandled a potential distribution deal with National Lampoon), Second Coming, Delivery, Reel Dream Productions and Red-Doors Entertainment are just a few. Earlier this year, the bankruptcy proceedings continued, with Polychrome forced to provide additional documents for review by all interested parties.
