Phantom film company wound up over investors’ missing £3m

A film company which claimed to be making a film of some of Shakespeare’s plays has been wound up in the High Court after an inquiry by Company Investigations, part of the Insolvency Service, found it had failed to record, manage or account for £3m in investors' funds

A confidential fact-finding investigation into Brighton-based Warlord Productions Ltd found the company received investor funds of almost £6m. After paying commission to third party broker firms of some £3m, the investigation was unable to reconcile the remaining funds.

The funds were claimed to have been used by the company, as co-producer, for production costs of Henry 5, a film version of three of William Shakespeare’s plays.

However, 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 investors’ 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 investors who made investments in excess of £3m.

The Insolvency Service said this would have adversely affected the company’s ability to make payments to those 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 Productions Ltd states it does not own the film rights, and that responsibility for filming is with another company.

The Insolvency Service said the investigation was hampered not only by the lack of records, but also by 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 office to protect the investors’ position.

David Hill, chief investigator at the Insolvency Service, said: ‘This company appeared to be a film production company in name only as it seemed to do little or no “filming” or “producing”.

‘The Insolvency Service will investigate companies that are acting against the public interest and put them out of circulation.’

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Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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