Vancouver: The cd-rom projects of two West Coast film producers are stuck in limbo while their common business partner finds its feet following a dramatic corporate takeover.

Producers at Vancouver’s Crescent Entertainment and Victoria’s Gumboot Productions – both established filmmakers – have partnership agreements to produce their first cd-roms with multimedia company Motion Works Group of Vancouver. However, Motion Works’ stock was halted March 27 on the Vancouver Stock Exchange when regulators demanded the company clarify its affairs.

There are allegations that u.s. court documents reveal Motion Works president John Hickman and companies he once controlled were found liable for more than us$2.2 million in losses connected with a Florida-based utility Hickman acquired in the mid-1980s. Hickman never disclosed his involvement in the utility.

Toronto’s Greenlight Communications swept in April 3 with a cash-and-assets purchase bid valued at $6 million, removed Hickman as executive (although he still owns part of the company) and sent a ripple through works in progress.

‘Still waiting’

Jayme Pfahl, a partner at Crescent, says the coventure A Ghost in the Dark – an interactive game about a ghost who solves the mystery of his own murder – is looking for financing and has a script ready to go. ‘We’re still waiting to hear (about the fate of the project). `Limbo’ is a good word for where we are,’ he says. ‘We’re hoping to hear soon.’

Producing demo

Gumboot is in the process of producing the demo for the cd-rom The Sacred Earth, based on Courtenay Milne’s best-selling book of the same name. The project is an interactive ‘pilgrimage’ to the spiritual power places on earth. The joint project, announced last October, was supposed to be a blending of Gumboot’s storytelling skills with Motion Works’ digital technology.

Gumboot partner Penny Joy returned to Victoria from a location shoot in Toronto to find Motion Works in turmoil. ‘It was a bit of a bolt out of the blue,’ she explains. ‘The dust is settling. Obviously, we hope that the project continues.’

While project partners wonder what’s in store, others already know their fates. At press time, 31 Motion Works employees were laid off by Greenlight, with about 35 remaining. Motion Works’ San Francisco office will be closed by the end of April. The company’s board, comprising Hickman, wife Pia Southam-Hickman and his two sons, was removed and Greenlight has nominated a new board including Gary Howsam, Don Gray and Russ Baker, who is in Vancouver managing the transition.

‘Taking time off’

Motion Works’ communications officer Shannon Walker says Hickman is ‘taking time off.’ Regarding specific projects, she adds: ‘Everything is under evaluation.’

Greenlight representative Peter Donato says Greenlight – a diversified multimedia company – seized the opportunity to gain operational control of Motion Works when the vse halted the stock. ‘They have good products in the works,’ he says. ‘The company was a good fit for Greenlight.’

Greenlight’s Vancouver film subsidiary Everest Entertainment is not involved in the acquisition, says Donato.

In the deal, Greenlight’s subsidiaries DHD PostImage, a Montreal-based special effects and multimedia software development company, and InMedia Software, a Vancouver-based multimedia company developing cd-rom, home entertainment and presentation software products, will be shifted to Motion Works. Greenlight will also invest $1 million to $2 million in Motion Works through financing arranged by undisclosed third parties.

Stock down

Motion Works, at the time of the halt, was trading on the vse at 46 cents per share, down from its 52-week high of $1.70 and slightly up from its low of 43 cents. Greenlight closed at $1.18 per share on the Toronto Stock Exchange’s over-the-counter market on April 4 and $1.20 on April 12. It’s 52-week high and low are $2.15 and 67 cents.

The deal is subject to shareholder and regulatory approval.

Vancouver stock analyst Jason Zandberg of Pacific International Securities is puzzled by the acquisition and concerned that Greenlight, already a diversified company, is further complicating its structure by adding Motion Works’ array of boutique-sized multimedia companies.

‘There doesn’t seem to be a lot of shareholder value in the deal, (but) if anyone can keep little, fragmented companies together, it’s Greenlight,’ says Zandberg, adding that he expects the venture to struggle for at least two years and be pared down.