Judge Freezes Assets Of Louisiana Film Studio

((HT: NOLA.com via Howard Bloom))

A judge Friday froze most of the assets of a movie studio at the heart of a $1.9 million investment dispute involving members of the New Orleans Saints.

U.S. Bankruptcy Judge Elizabeth Magner took the action against Louisiana Film Studios LLC, the target of an involuntary bankruptcy suit by several buyers of state movie industry tax credits peddled by studio chief executive Wayne Read.

The buyers were supposed to be paid $1.33 on March 31 for each dollar invested. But since then, state film office officials have said Read never even applied for the credits.

Magner set a hearing for Aug. 7 on whether to appoint a court-supervised financial overseer. Read, who was not at the hearing, signed an agreement late Thursday saying he would not dispose of any of the studio's assets.

Read has not hired an attorney for the studio, but lawyer William Patrick appeared at the hearing on the studio's behalf, saying he had not yet accepted a retainer. When attorneys said Read had been spotted at the federal courthouse complex, Patrick tried to reach him by telephone at the judge's order.

"I'd like to see the whites of this individual's eyes," Magner said.

Read never appeared. After that, Magner met with attorneys behind closed doors, then put the agreement Read signed into effect.

Among the current and former members of the Saints pursuing the bankruptcy suit are linebacker Scott Shanle, former Saints punter Mitch Berger and long snapper Kevin Houser, now with the Seattle Seahawks, who thought they were buying tax credits. Other buyers included Coach Sean Payton, quarterback Drew Brees and former star Archie Manning.

Read has said he ran into higher-than-expected expenses and lower-than-forecasted revenues in starting up the studio. He said the tax credits were never applied for at the end of 2008 because of confusion over what expenses qualified for credits. He has said he plans to pay back the buyers after finding other investors.

No criminal charges have been filed. Jimmy Castex, an attorney representing a construction company also pushing the involuntary bankruptcy suit, has said the FBI has contacted parties involved in the case.

Illinois court records show Read paid $452,000 on January 21 to settle a dispute over another failed investment involving the movie business.