A movie studio based in the southern U.S. is facing serious financial troubles after a contract dispute with a California firm. That movie studio, Meddin Studios, actually filed bankruptcy because of the contract dispute with Radioactive Giant, a West Coast filmmaking group. Meddin is notorious within the industry at this time because of the violent and tragic death of one of their camera assistants during a train-related movie scene.
In that contract dispute, each of the companies contends that the other owes unpaid money. However, Radioactive Giant is not the only company with complaints against Meddin. A glass company in Savanna, Georgia -- where Meddin is based -- filed a lien for $27,400 after the studio reportedly refused to pay for work. That glass studio has gone into a "cash flow crisis," according to the owner, allegedly because of Meddin's poor business conduct.
Reports show that Meddin Studios used millions of dollars in small-business loans for startup money. Since the company has declared bankruptcy, taxpayers could now be on the hook for $3 million in loans that have gone into default. That bankruptcy was filed during the summer of 2013, though it does not appear to have been fully processed at this time.
Meddin made headlines back in 2010 when President Obama visited the studios to commend the developers on their use of Small Business Administration loans. That was the same year that the glass company filed the complaint and obtained the lien. At least one other company also pursued such measures against the studio.
Contract disputes can have a significant impact on small business' ability to conduct their operations. Even contract disputes that seem petty or illegitimate can still eat up time and resources. Small businesses may benefit from the assistance of a business attorney, who can help owners learn more about their legal rights during a breach of contract claim.
Source: The Atlanta Journal-Constitution, "Studio in fatal train wreck faced financial woes" Shannon McCaffrey, Apr. 27, 2014