Michael Madsen, also known as Mr Blonde in the cult bloodfest film Resevoir Dogs, today took part in...
Michael Madsen, also known as Mr Blonde in the cult bloodfest film Resevoir Dogs, today took part in the launch of a prospectus that is attempting to lure UK investors into backing a new project in line with enterprise investment scheme, EIS, rules.
Together with director Nick Egan - of Duran Duran video fame - Martin Kemp - of The Krays and Eastenders fame - and co-producer and script writer Clark Westerman, Madsen hopes to close £8m worth of fund-raising to create a new company before October this year, when filming would begin in London.
EIS rules allow investors to offset capital gains tax by holding onto their shares for a minimum of three years, by which time the producers of the film, tentatively called Red Light Runners, would hope to have produced handy returns for investors through screenings, sales of distribution rights, product placements, music tie-ins and video rental fees.
Red Light Runners is being pitched as a "sociological heist" involving a storyline of how to turn petty criminals into big time gangsters.
Investors are likely to be wary of submitting to a heist themselves, and Westerman admitted that making films was a "high risk" engagement.
Calling it one for high net worth individuals and institutions, he said the whole thing would be called off if an initial sum of £2m were not raised by 17 July - the minimum investment is £2,000.
The prospectus points out that only £1.4m of that initial amount will actually go to making the picture after expenses are deducted.
And investors may not like the fact that once the full £8m has been raised, $500,000 will immediately go to Westerman as payment for the film script, in addition to the £45,000 per year over the next three years that he will rake in as director of the company being set up through the scheme.
Investors also run the risk of seeing their shares diluted through further fund-raising activities if more money is needed to finish the project, something that may well be required if other actors such as Hollywood legends Harvey Keitel and Dennis Hopper are to be persuaded to also join the party.
Unlike investing in other types of companies, there are no minimum guaranteed returns from making and selling films, not even tangible assets that could be sold off to repay creditors if the venture fails.
Madsen and Westman argue, however, that even their worst case scenario of ending up with a direct-to-video movie would still return an amount equal to the initial investment: they cite ongoing rental income from Resevoir Dogs as evidence of the rental income possible in the video market.
The firm's auditor Baker Tilly added that another alternative if the funds were not raised successfully would be to approach a major Hollywood studio for successful financing.
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