Newspaper article THE JOURNAL RECORD

Bond Companies: Silent Guardians over Independent Films

Newspaper article THE JOURNAL RECORD

Bond Companies: Silent Guardians over Independent Films

Article excerpt

LOS ANGELES -- When the Academy Award winners make their acceptance speeches Monday night, they'll give credit to the people who helped them along the way -- parents, teachers, writers, directors, producers, co-stars, crew members and perhaps even agents. Don't expect Cinema Completions Inc. to be mentioned.

Yet in a year when independently financed films are dominating the Oscar's major categories, a trio of completion bond companies -- Cinema Completions, Film Finances and International Film Guarantors - - were crucial players in getting the movies made. "Unless your film is being financed by a single source, you're going to need a completion bond, because the bank will demand it," said Gina Resnick, producer of the soon-to-be-released Female Perversions. A completion bond is the standard means to assure investors that a film will be completed and distributed even if it runs over budget. If a movie runs over budget, the completion company pays the extra costs. Only a few movies that go into wide release -- those financed entirely by studios or those with budgets of far less than $1 million -- are usually made without a completion bond. Of the films up for a Best Picture Oscar, only Sony Corp.'s Jerry Maguire lacked such a bond. Fargo, Shine, The English Patient and Secrets and Lies all needed a completion bond as part of their financing package. Completion bonds usually cost producers between 2.5 percent and 6 percent of their budgets. The most popular agreement is for 5 percent with a 2 percent rebate if there is no claim. The completion bond is given only after the company clears the script, budget, shooting schedule, insurance policies, locations and cast, usually following meetings with its producer, director, production accountant and distributor. "It's a very labor-intensive process," said Joan Stigliano, senior vice president of client relations for International Film Guarantors. That's why completion companies are typically staffed with Hollywood veterans who have decades of experience in producing and financing movies. "We have people who know what it takes to edit a film and who understand the accounting process," she said. …

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