Paragon Entertainment’s long-range animation production plans have moved into the short term, boosted by its acquisition of the studio, production and library assets of the Lacewood Group.

It’s too early, post legal developments which will see Paragon take over Lacewood’s assets, to release a full animation slate, says Paragon ceo Jon Slan. But Paragon currently has two animation series in development with American networks and Slan sees a potential ‘great fit to do them in Lacewood.’ An animated series version of the feature film Time Bandits, the rights to which Paragon owns under its acquisition of the HandMade film library, could also be amongst the first projects.

‘Animation is very important to us, and we continue to feel it’s a great growth area,’ says Slan.

The mostly live-action production company is preparing to take on the animation market after Sheldon Wiseman’s Ottawa-based Lacewood failed to repay a $2.5 million debt to Paragon which was grounded in the 1995 creation of Lacewood Productions, a 50/50 joint venture between the two companies.

Amongst the Lacewood assets under Paragon’s control are two current productions, Legends of the Land, which consists of three half-hour specials for the cbc, and two half-hours for Baton titled Teddy Bears. ‘If these half-hours are successful we could be interested in doing some more with the cbc and with Baton,’ says Slan.

Lacewood’s library ­ which Wiseman values at between $3 million and $3.5 million ­ consists of more than 150 half-hours of animated programming, including 39 original episodes of the preschool series Katie and Orbie for pbs and Family Channel. Lacewood’s past major joint-venture productions include two 13-episode cycles of Savage Dragon (USA Network, MCA Home Video, teletoon) and the 13-episode series Vortech, a Canada-France coproduction.

To questions on the accuracy of Wiseman’s projected $3-million-plus value on the library, a half-million over and above what Paragon is owed, Slan says: ‘I believe that in this process the receiver will be valuing everything and then if a third party wants to come along and make a bid for it, they can. If Sheldon wants to make a bid for the library at that amount of money, certainly Paragon who is owed $2.5 million would be pleased to accept it.’

As for the animation studio, which employs approximately 20 animation artists, all of whom are on contract, Slan says there are certain Lacewood employees that Paragon considers important but that no firm decisions have been made yet.

‘We’re just beginning to analyze who and how many. We certainly see certain expertise there that we’ll want to take benefit of and we’ve always thought that there is a terrific marriage between the technical animation expertise of the Lacewood employees and Paragon’s development expertise, infrastructure, and distribution potential.’

The takeover at hand began early this year after a plan to see Paragon increase its stake in Lacewood Productions to 75% from 50% went awry. Wiseman later filed for bankruptcy protection and had sought an investment deal from actor Leslie Nielsen to repay the court-ordered $2.5 million debt. Wiseman says, ‘Nielsen’s lawyers had technical concerns that related to closing documents and were unable to satisfy themselves that they would be receiving good security from Paragon.’

Slan insists that Paragon had not orchestrated the subsequent takeover, saying, ‘We had openly discussed and sent memos to Sheldon saying that the best way to reorganize these assets would be to put in a receiver, to put together with a clean balance sheet all the viable assets, and to take Lacewood forward with the status quo. That was always our goal, that was always our intent, so it was really surprising to everyone at Paragon when Sheldon applied for bankruptcy protection.’

Wiseman says he plans to form a new company and animation studio to develop and produce animation product in Ottawa. ‘To avoid conflict we will be doing business under another name that has yet to be determined,’ says Wiseman, who plans to announce specific plans for the new company next month.