03-06-2011

Hungarian Banks Threaten to Close Film Producers Accounts

By FNE Staff

BUDAPEST: The bank accounts of 19 production companies faced closure as of 1 June 2011, as loan agreements expired on 31 May. Andrew Vajna, Hungary's newly appointed film commissioner, is reported to be in negotiations with at least four banks.

Raiffeissen, Erste, Banco Popolare and CIB Bank closed the bank accounts of several film production companies earlier this year. In all, 49 production companies are involved.

Productions companies were placed in an impossible situation when the Hungarian Motion Picture Foundation (www.mmka.hu) became insolvent. According to the Hungarian press agency MTI, MMKA has 1.5 billion forint in debt. In early May Raiffeissen confiscated two cars owned by MMKA.

The president of the Hungarian Audiovisual Producers Association Adam Nemenyi stated:
As it is not the Hungarian producers fault that they are in this situation we believe that the banks should have more patience and understanding. As far as we know there are continious negotiations in place between the banks and Mr Andy Vajna and we are positive that they will find a sufficient and comforting outcome to all of the parties involved.

Hungarian film producers signed agreements with MMK and the banks in 2010 to for funding for film production. The banks advanced the money which was to be paid back when MMK paid the money owed under the agreements. But when MMK became insolvent the banks came after the producers who had guaranteed the contracts. Many Hungarian producers face serious personal hardship now as banks demand they repay the money