Production Company Behind Brad Pitt Movie Files for Chapter 11 Bankruptcy
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UPDATED: Aug 29, 2012
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The latest news in Hollywood bankruptcies is that Inferno International LLC, a production company responsible for Brad Pitt’s most recent film Killing Them Softly, has filed for Chapter 11 bankruptcy.
The goal of a Chapter 11 business bankruptcy is to restructure outstanding debts while continuing to operate. This means the company will stay in business, whereas if they were filing a Chapter 7 bankruptcy they would be liquidating their assets and going out of business. More information on filing Ch. 11 bankruptcy can be found here.
Inferno International owners Jim Seibel and Bill Johnson have signed an official bankruptcy petition to set the filing in motion. When filing bankruptcy, this is the first step. The next step in a filing like this is to meet with creditors to draft a repayment plan. Large enterprises like Inferno will have a much more complicated and involved payment plan, whereas consumer filings for the average individual tend to be more straightforward, usually involving credit card and home loan debts.
Inferno filed their Ch. 11 petition “to sort out the numerous claims, disputes and litigation involving their businesses and assets” and they say they will be a “stronger and healthier business enterprise” after bankruptcy, according to an article in The Wall Street Journal.
Bankruptcy has a bad rap, but it can sometimes be a good thing. It can help alleviate some of the burden when companies are facing difficulty paying debts or when creditors are becoming aggressive, allowing business to get back on track. In addition, when large companies find themselves involved in litigation, bankruptcy can be a tool to safeguard assets. This is the case with Inferno. In 2011, a judgment was entered against Inferno in a high profile lawsuit involving an associated producer being accused of taking millions of dollars in illegal tax credits during the production of 2005 hit film Just Friends. Filing for Chapter 11 bankruptcy is allowing the company to protect assets in the wake of litigious turmoil, while they appeal the judge’s decision.
In an August 24th statement, Inferno noted that their affiliated entities, Inferno Films and Inferno Features, are not involved in the Chapter 11 filing. It is possible for a business of this size to petition for protection of one vertical of their enterprise, but not others.