KEY POINTS:
Film crews and actors who worked on television ads for an award-winning production house are unlikely to receive hundreds of thousands of dollars owed to them - with the shareholders first in line for any payout.
Freelancers were left struggling to pay mortgages and meet expenses after the demise of Silverscreen Productions.
The company, owned by Geoff Dixon and a trust, was put into voluntary liquidation last month with difficult times in the industry being blamed.
Silverscreen Productions was behind the creation of ads such as the L&P series celebrating Kiwiana. The stubbies ad won gold for best direction at the Axis Awards in 2005.
It was also behind the Telecom ads featuring children marching along Queen St and "Fast Eddie" downloading his email.
The company had completed ads for TSB bank and a Vodafone commercial to be aired in Germany before it went under.
The preliminary liquidation report shows unsecured creditors [trade] are owed $1.25 million, while shareholders advanced $3.23 million to the company.
Assets include vehicles, furniture and computers but also include related party accounts and advances that, if recovered, would leave more than $1 million available to preferential creditors.
A family trust appears to be the main secured creditor, believed to be owed $1.579 million, and first in line.
Mr Dixon, his wife, Laurien, and business partner John Fokerd appear to be the trustees.
Rod Pardington, a corporate restructuring partner at Deloitte, said the report suggested shareholders and related parties could lose about $5 million but also raised questions about whether the company had traded while insolvent.
He said creditors might ask the liquidator the background to the trust's priority for money as a secured creditor. "They may well have a legal priority but I would have thought both that, and the potential for liability of directors for insolvent trading, would be matters of discussion at the creditors' meeting."
Creditors will have a chance to quiz the liquidator at a meeting this week.
Contractors and industry representatives said they wanted to know if any money from the television commercial business was channelled into sister company Silverscreen Films - which co-produced the troubled feature River Queen - or Silverscreen Australia.
Creditors will also ask about plans for the company's production studios in Ponsonby, which property records show are owned by Mr Dixon and business partners and valued at almost $5.5 million.
The New Zealand Film and Video Technicians Guild, which represents film and video crew, said it had been "putting pressure" on Silverscreen to pay freelance crew months before Mr Dixon put the company into voluntary liquidation.
President Alun Bollinger said the company had a long-standing reputation as "slow payers".
"It wasn't immediately obvious the problem was any different from normal except it seemed people were taking longer to be paid."
Guild executive officer Janet Klee knew of people who were owed "tens of thousands of dollars", with one person trying to recover $50,000.
The guild had been in discussions with Silverscreen for two years over the time it took to pay. Several months before the company went under, the guild recommended members "seriously consider whether to accept any bookings".
Acting agency Auckland Actors said it was a creditor, as were other acting agencies, but declined further comment.
Denis Smith, the owner of Location Services West, which supplied Silverscreen, said he was owed just under $7000 for supplying items such as tables, road cones and reflective vests to commercial shoots.
A crew manager, who did not want to be named, said he was owed up to $10,000 and had been unable to pay his mortgage since October, when he last received money from the company.
"I'm not exactly holding my breath to get paid," he said.
Silverscreen Productions would often wait up to two months to pay freelancers but the company received the majority of its payment for a commercial - many with budgets around the $1 million mark - by the time it was filmed and edited, the man said.
Mr Dixon could not be reached for comment but last month blamed tough industry conditions for putting his company into voluntary liquidation.
"While times have been tough ... the consequence of recent events, came as a devastating blow to us all at Silverscreen in New Zealand."
Mr Dixon apologised for his apparent lack of communication about how the failure came about.
He said there might be people who "demand blood where there is none - but my heart is truly heavy".
Film Crews, an agency for freelance crew members, said the industry was in good health and they struggled to meet demand.
Off the screen
* Silverscreen Productions was one of the oldest and largest television commercial production houses.
* It made well-known commercials such as the L&P series and the Telecom children's ads.
* It owes $5.4 million to unsecured creditors.
* Assets include furniture, computers, television equipment and vehicles.
