Creditors petitioned Friday to force Producers Sales Organization, a major overseas distributor of Hollywood films, into involuntary bankruptcy proceedings.
Published reports have said that PSO, which over the last year had embarked on an ambitious film production program, was discussing a merger with Vestron Inc. and others because of financial problems.
Late Friday, John Hyde, who has been PSO's chief executive, issued a cryptic statement indicating that he and "other former officers" have been waging a legal struggle with the company's major lenders, New York-based Chemical Bank and First National Bank of Boston, for PSO's film production.
The statement said the banks had sought possession of "custodial accounts" containing funds that PSO has collected as foreign sales agents for other producers.
The statement did not make it clear who the "former officers" were, nor whether Hyde had resigned as well.
ABC Motion Pictures and Sherwood Productions are the major creditors who filed the bankruptcy petition. A third creditor that signed the petition is Giorgio Moroder Enterprises, a record producer.
Seeking 'White Knight'
Hyde, who had been seeking a "white knight" investor to help the firm out of its crisis, said in the brief statement that the creditors' petition in U.S. Bankruptcy Court here "is both expected and endorsed by the company."
He and other PSO officials were not available for comment beyond the statement, which was put out by PSO's Santa Monica office.
The statement in full said:
"Chemical Bank and First National Bank of Boston refused to acknowledge the sanctity of the producer's custodial accounts, which hold the producer's share of all distribution monies.
"The other former officers of PSO and I have steadfastly refused to allow the banks to gain possession of these monies. Therefore, this move by certain producers is both expected and endorsed by the company, stated John Hyde."
A woman who issued the statement refused to say if all or most of the PSO officers had resigned. "That's the only statement we can give now," said the woman, who identified herself only by a first name and declined to state her position with PSO. "The rest will be in the court documents.
Earlier, Hyde and Gregory Cascante, PSO president and chief operating officer, were said not to be at the firm's offices.
In the bankruptcy court petition, the creditors claim that PSO owes them more than $2 million. The largest amount, $1.5 million, is claimed by Sherwood, a now-dormant film company headed by producer David Begelman. Begelman now produces through his Gladden Productions.
'Silkwood' Among Films Distributed
Skip Miller, of the Beverly Hills law firm representing the creditors, said the "more than" $400,000 allegedly owed ABC was being held in trust by PSO. ABC pictures distributed abroad by PSO have included "Silkwood" and "Summer Camp," he said.
Miller said he did not know the details of the other petitioners' claims against PSO.
After the Hyde statement, Miller could not be reached for comment on the purported efforts by two banks to get custody of the custodial accounts. The Hyde statement came after banking hours, and the banks could not be reached for comment.
In late 1984, PSO went into a short-lived merger with New York-based Delphi Cos. to make $350 million available for a five-year film production program.
PSO's box-office duds, which included "Clan of the Cave Bear," apparently contributed to its recent financial woes.
Cascante was quoted earlier this month by Daily Variety as saying that the company still had deals with Tri-Star Pictures for five films a year and with CBS/Fox Video for a total of 80 pictures.
Daily Variety also cited reports that Cascante was in Stamford, Conn., for discussions with Vestron.