German firm’s action against well-known Irish film producers is resolved

The long-running legal saga between a German film company and two well-known Irish producers over the running of a film production company has been resolved.

Berlin-based W2 Filmproduktion Vertriebs GmbH claim was against producers Morgan O’Sullivan and James Flynn who it is alleged diverted the funds out of Octagon Films Ltd, a company they had all been shareholders in.

The German company alleged sums of between €40 million and €50 million were diverted out of the company to either themselves personally or corporate entities controlled by them. Both the defendants, who are directors in Octagon, had strongly denied the allegations.

The action, which first came before the court in 2016 returned on Monday morning before Ms Justice Teresa Pilkington, who was informed that the case had been resolved after the sides had entered into a mediation.

Edward Farrelly SC for the German company said that it had been agreed between the parties that the defendants had as part of the settlement agreed to purchase his client’s shares in Octagon.

Under the agreement the shares in the film production company are to purchased by certain dates, counsel added. Counsel for the two producers Bernard Dunleavy SC, appearing with Eamon Marray Bl said his side were consenting to the settlement.

Under the agreement counsel said that his clients will retain control over Octagon, and the entire proceedings can now be struck out on consent. No other details of the settlement, which are understood to be confidential, were revealed in open court. Ms Justice Pilkington welcomed the resolution of what a “a very difficult and complex matter” that had been before the courts on many occasions dating back to 2016.

Octagon, it was claimed, had been involved in dozens of TV and movie productions shot in Ireland. These include Vikings, The Tudors, Penny Dreadful, The Borgias, Love Hate, Swag, Skippy Dies, Calvary, Ondine, PS I Love You and many more. The company was also linked to Vikings Valhalla, a spin-off from the Vikings, much of which was filmed in Ireland, which is being made by MGM Television for Netflix.

W2 had sued the producers on behalf of Octagon by way of a derivative action which is a claim brought by a shareholder on behalf of a corporation against another party.

W2, which invests in international film productions, claimed it acquired 49 per cent of Octagon’s shares in 2002. W2 sought damages for alleged breach of duty, alleged fraud, and alleged conspiracy against the producers.

The producers denied diverting any fees, income or opportunities that were due to Octagon to themselves or to any corporate entities controlled by them.

Mr O’Sullivan of Ardmore Park, Bray, Co Wicklow and Mr Flynn of Ballyedmonduff Road, Stepaside, Dublin, who between them own 51 per cent of Octagon’s shares denied they traded as Octagon or had used the company’s name and reputation.

They claimed Octagon was set up as a company devoted to film development and production activity and is a separate entity to their work for hire film production services they have been associated with.