Investors in Mr Leo Kirch's media empire abandoned plans to rescue it after discovering a series of hidden liabilities and funding arrangements, particularly a deal of roughly €150 million to support his son, Mr Thomas Kirch.
As more Kirch businesses look set to slip into insolvency this week, it has emerged that KirchMedia, the group's core film rights and broadcasting arm, provided the money to fund one of Mr Thomas Kirch's investments.
One person involved with the attempted rescue said Kirch- Media had granted between €150 million and €200 million in loans at least a year ago to Mr Thomas Kirch. The money was earmarked to cover investments by HOT Networks, a German home shopping television company, of which Mr Thomas Kirch holds 26.7 per cent. It is understood that HOT's owners are now seeking a buyer.
The discovery of this and other undisclosed transactions at KirchMedia, which filed for insolvency last week, scuppered efforts by banks and investors to restructure the group and save it from administration.
The collapse of talks between Kirch's big four German creditor banks and minority investors, who include Mr Rupert Murdoch, Italian premier Mr Silvio Berlusconi and Saudi investor Prince Alwaleed, resulted in KirchMedia being put into administration last week.
