Embattled: Bret Saxon, the target of several lawsuits, calls allegations… (Bryan Allen Photo )
Reporting from Columbus, Miss. — — On a spring evening in this Mississippi town, Jim Walker dug into a plate of roast beef, macaroni and cheese, and green beans at the Palmer Home for Children and tried to swallow his frustration.
The orphanage was hosting an awards dinner for 65 of its charges — some in high chairs, others in high school. The kids, who wore Easter dresses and secondhand ties, accepted prizes for spiritual growth and certificates for artistic excellence. A 22-year-old who arrived at Palmer Home at 8 months old and graduated from the University of Mississippi received a top honor.
As poignant as the evening was, Walker, an orphanage board member and its former development director, couldn't help but be upset that the accomplishments of the privately funded, 116-year-old institution were unfolding in obscurity. Palmer Home was the sort of place, Walker believed, that would make a heartwarming movie, showing that orphanages weren't Dickensian warrens of misery.
It was scarcely some Hollywood fantasy.
In fact, a year earlier, cameras were set to roll on "Miracle at Palmer Home." David Mickey Evans, who directed "The Sandlot," was preparing to shoot the fictionalized story of three kids who run away from the orphanage to make room for needier children. Walker, who cowrote the movie's story, said the budget was initially $7 million. But the project collapsed days before filming was to begin, he said, and some of the movie's investors wonder where their money — some $1 million — went.
A former colleague of the film's producer, Bret Saxon, thinks he knows: Scott Barbour contends in a lawsuit that Saxon and his companies took the money to finance a "luxury lifestyle." Saxon, the suit claims, followed the same pattern on other film projects: Create a "falsely exaggerated" budget for a film, then "attempt to produce the movie project for substantially less" and "pocket the difference."
The Palmer Home movie is one of 10 independently financed film projects — including one starring Woody Harrelson, another with Luke Perry, and one about California con man Barry Minkow — that have sparked a spate of lawsuits in the last year and a half against Saxon. A veteran of the infomercial world, the 45-year-old Saxon has co-written books about how to meet famous people and schmooze the rich and powerful.
Investors have filed six lawsuits against Saxon, alleging that he misappropriated or failed to repay more than $7.8 million in investments, loans and fees. In the first case, filed in February 2010, a Tennessee arbitrator found Saxon liable for fraud and breach of contract and ordered him to pay investor Jon Yarbrough $2.25 million.
A lawyer for Saxon, Andrew Jablon, said, "Mr. Saxon agreed, at the advice of his counsel in Tennessee, to enter into a stipulated judgment as part of a business resolution." In the other lawsuits, which are all in the early stages of litigation, Jablon said Saxon also did nothing wrong. Jablon argued that Barbour has tried to extort money from Saxon and that others have been motivated to sue him because of money woes not of Saxon's making.
As for the money invested in "Miracle at Palmer Home," it was spent on "pre-production and production costs," Jablon said. "There was no theft of assets — nothing." The movie, Jablon said, was postponed because a cast member became ill.
Outside the system
The saga of Bret Saxon and the question of whether he is simply an unlucky producer or, as alleged in the lawsuits, a fraud provides a window into film financing in modern Hollywood and the risks of such investments.
Independent producers like Saxon serve as both fundraisers and filmmakers, and the roles are linked more closely than ever. The major studios have cut the number of movies they make, concentrating on extravaganzas such as "Transformers" and "Pirates of the Caribbean." Of the 560 films released theatrically in the United States last year, only 104 came from the major studios, according to the Motion Picture Assn. of America, down 6% from 111 major studio releases in 2009.
Independent producers are the engines behind the hundreds of other films. They comb the world for financing, pitching their projects at international movie markets, over Beverly Hills lunches, on the decks of yachts moored at the Cannes Film Festival. Many independently produced movies are made with no guarantee of distribution; the completed films are shopped around in the hopes of attracting a sale that will more than cover their budgets.
Cash has flooded into movies from international tax deals, government subsidies, foreign banks, hedge funds and wealthy individuals. Although the investments are highly speculative, they offer investors a chance to mingle with stars, see their names on the big screen, and, in rare cases such as the independent blockbusters "Little Miss Sunshine" or "My Big Fat Greek Wedding," collect a windfall.