A film production company has been wound up by the High Court for failing to record, manage or account for around £3m of private investment funds, following a confidential investigation by Company Investigations of the Insolvency Service.
This found that Brighton-based Warlord Productions Ltd, a company which claimed it would act as a co-producer of Henry 5, a film version of three of William Shakespeare’s plays, received almost £6m in investor funds.
According to the Insolvency Service, after paying commission to third party broker firms of some £3m, they were unable to reconcile the remaining funds.
Whilst funds were claimed to have been used for production costs, Michael Cowan, the company’s former sole director, was unable to provide either a “satisfactory explanation” or adequate records to account for the company’s expenditure of the private investor’s funds.
In addition, the latest financial statements prepared for Warlord showed that it was “heavily balance sheet insolvent” at 31 January 2014.
The company also failed to maintain records which accurately recorded investors, and as a result, the investigation was unable to identify those who made investments in excess of £3m.
This would have adversely affected the company’s ability to make payments to its investors should the film be completed and make a profit. Information provided to investors made unsubstantiated claims regarding well-known actors who had agreed to appear in the film.
Warlord stated it did not own the film rights and that responsibility for filming was with another company.
The investigation was hampered not only by the lack of records, but also by Mr Cowan’s view that he was director ‘in name only’ and that responsibility for the company’s management lay elsewhere. When he resigned as director on 16 January 2015, the company was ‘abandoned’ with no-one in the office to protect the investors’ position.
David Hill, chief investigator at the Insolvency Service, said that it appeared to be a film production company in name only as it seemed to do little or no ‘filming’ or producing’.
donia.o’loughlin@ft.com
