Animator Says Planned Sale to Indian Firm Has Fizzled

Cartoon animator Film Roman notified the Securities and Exchange Commission on Monday that its planned $15-million sale to Pentamedia Graphics Ltd. went “poof” when the Indian software company failed to come up with the promised cash.

Pentamedia, based in Chennai, India, missed an extended deadline Friday to make a payment toward 60% of newly issued common stock for the North Hollywood-based boutique studio, according to John Hyde, chief executive of Film Roman.

Pentamedia tried to restructure the Film Roman deal after the Indian company’s share price plunged, Hyde said. He said the software company made a series of counterproposals that extended the date of the cash payments and then, instead of cash, pledged securities that trade on the Luxembourg Exchange.

Film Roman animates “The Simpsons” and “King of the Hill” for Fox television and “The Oblongs” for Warner Bros. The 17-year-old studio lost $2.6 million last year and $7.5 million in 1999.

Pentamedia director Ken Silverman, who is based in Cerritos, said Monday that he could not comment because he had not seen Film Roman’s SEC filings.

Pentamedia has 15 days to resolve what Film Roman is calling a breach in the Jan. 31 stock-purchase agreement approved by both sides. Monday’s SEC filing was triggered when Pentamedia missed the Friday deadline for payment, an extension of a March 26 deadline.

Film Roman shareholders overwhelmingly approved the deal March 26. But directors rejected Pentamedia’s restructured proposals this month.

“There is no need to accept a highly volatile security in return for our shares,” Hyde said Monday. “The funds from Pentamedia were primarily for future expansion and are not needed for day-to-day operations.”