TV producers offer to go to mediation in row with German film group

A dispute between a German film company and two Irish film producers over claims that funds of between €40 million and €50 million were diverted out of a film production company may go to mediation.

The claim by Berlin-based W2 Filmproduktion Vertriebs is against producers Morgan O'Sullivan and James Flynn who, it is alleged, diverted funds to themselves or to corporate entities controlled by them, and out of Octagon Films Ltd, a company of which they are all shareholders.

Both men deny the allegations.

The action, which first came before the court in 2016, returned before Ms Justice Teresa Pilkington on Thursday. Bernard Dunleavy SC, for the producers, said they were making an open offer to go to mediation in an attempt have the dispute resolved.

Paul Gardiner SC, for W2, said he had to take instructions in relation to the offer but he believed W2 would welcome the opportunity for mediation.

Mr Dunleavy said the airing and “drip feeding” of matters relating to the producers in a public court was damaging their business. His clients were seeking mediation as allegations made by W2 that his clients had breached undertakings given to the court had damaged their business.

Counsel said the alleged breaches are fully denied and arise out of claims that funds generated by a proposed TV series Vikings Valhalla, which W2 alleges should go to Octagon, will be diverted to the defendants and may result in W2 seeking injunction reliefs.

His clients had said the funds would be “ringfenced” and placed with companies subject of the undertakings.

His side was being "fully transparent" and was providing all information sought in regards to Vikings Valhalla, a spin-off from the Vikings TV series filmed in Ireland, being made by MGM Television for Netflix.

W2, which invests in international film productions, says it acquired 49 per cent of Octagon’s shares in 2002.

The producers deny diverting any fees, income or opportunities that were due to Octagon to themselves or to any corporate entities controlled by them.

Mr O’Sullivan of Ardmore Park, Bray, Co Wicklow and Mr Flynn of Ballyedmonduff Road, Stepaside, Dublin, who between them own 51 per cent of Octagon’s shares, deny they traded as Octagon or used the company’s name and reputation.

They claim Octagon was set up as a company devoted to film development and production activity and is a separate entity to their work for hire film production services.