Open Road Films seeks approval of $2.5 million Bank Leumi settlement

By Caroline Salls

Pittsburgh, Feb. 8 – Open Road Films, LLC requested court approval of a settlement reached with Bank Leumi, USA, according to a motion filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

Open Road said it obtained a loan from Bank Leumi as part of the financing for the production of its City of Lies film.

In connection with the loan agreement, Bank Leumi, Good Films, Miramax, and Open Road entered into a distributor interparty agreement under which Miramax and Open Road agreed to make minimum guarantee payments directly to the bank if they came due under the distribution deal.

The company said a dispute arose between the parties about whether required delivery materials had been submitted and whether the guarantee payments were due.

Although the picture was never released in theaters, Open Road said Bank Leumi claims that it is owed $5.4 million as a minimum guarantee and that Open Road was required to release the picture with an expenditure of at least $10 million for marketing and distribution expenses.

Bank Leumi filed an $18.54 million claim in Open Road’s bankruptcy case on Jan. 25.

Under the proposed settlement, the Open Road debtors have agreed to release any right, title, and interest in the picture, and the Bank Leumi claim will be allowed as a $2.5 million general unsecured claims.

Open Road is a Los Angeles-based film operation. The company filed bankruptcy on Sept. 6 under Chapter 11 case number 18-12012.

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