Endemol Shine Group (ESG) will continue to wind down Endemol Shine Turkey (EST) despite an Istanbul court yesterday rejecting the company’s long-running attempt to file for insolvency in the country.
ESG started shuttering its Turkish division in 2017 and initiated insolvency proceedings after an investigation into the business revealed “serious management” issues.
EST commercial chief Hakan Eren and CEO Gökan Tatarer were subsequently fired by the group, prompting a protracted three-year battle that has seen both sides threatening to sue each other.
Eren and EST staff vehemently refuted the claims against them and argued that EST was not insolvent. The Turkish arm has been behind shows including Intersection and Broken Pieces for Fox in Turkey, but the proceedings saw production staff and actors protesting after failing to be paid for their services.
Independent management administrators then took over responsibility at EST from ESG’s senior management after a ruling by the Turkish courts in 2018 as the legal proceedings dragged on, with revenues from international sales of shows such as Winter Sun being directed to creditors.
TBI understands almost $10m has been collected from overseas scripted sales since the legal process began with a similar sum expected for future sales.
The Turkish court ruling this week has also now found that EST cannot be closed down on insolvency grounds, because its balance sheet holds TL55m ($9.5m) and the company has been able to pay debts.
Eren claimed ESG’s legal counsel, Guner Law Office, had “misled the ESG management by convincing them the court will grant the bankruptcy decision.”
He told TBI: “After two-and-a-half years, the court resolved to reject bankruptcy as we articulated from day one. This definitely is a legal victory. Now, it’s time for ESG management to understand and to admit that the company is not insolvent and never was.”
Despite the ruling, Eren admitted that Endemol Shine had “a negative brand value in Turkey” and said “the best decision would be to close the division down after paying all the debts.”
In response, ESG reaffirmed that it would continue to pay down debts and said that process would not be affected by the ruling.
ESG said it would consider its options, including potentially appealing the insolvency decision. TBI understands the company will also continue winding down the division and has no intention to reverse its attempts to close its Turkish arm.
In a statement to TBI, the company added: “The unsustainable conditions, created by the former local leadership, means our Turkish business continues to not be a going concern.
“Regardless, creditors will continue to be repaid as quickly and fairly as possible, as overseen by the Court-appointed administrators, and today’s outcome does not change this.”