January 30, 2025 - It is not uncommon for feature films produced for the cinema to be box office flops. Box office takings remain well below expectations.

German criminal defense lawyer on flops in film industry 

It is a well-established fact in the film industry that only a third of film productions actually make money. No film studio is financially successful with the majority of its releases; instead, the industry average for successfull box office takings is 36% of films.

Flops, where box office takings do not cover the film's budget, advertising and distribution costs often have inglorious aftermaths. When law firms known in the industry gather around investors who want their money back, public prosecutors are frequently used to force the initiator of the film project to their knees.

Düsseldorf Public Prosecutor's Office: No capital investment fraud within the meaning of Section 264a of the German Criminal Code

The Düsseldorf Public Prosecutor's Office (121 Js 415/23) takes a much better view on our case and in January 2025 rejects the alleged capital investment fraud. The preliminary investigation was discontinued due to lack of suspicion (Section 170 II StPO).

Intentional capital investment fraud within the meaning of Section 264a the German Criminal Code (StGB) can only be established if those responsible knew that the information in their prospectus was false or that essential facts had been concealed. However, the Düsseldorf public prosecutor's office saidf to be unable to establish such intent in our case.

Then the same lawyers who are encouraging investors to seek damages talk about alleged delictual claims under Section 823 (2) BGB in conjunction with Section 264a StGB and Section 826 BGB and even talk in Latin about alleged liability arising from “culpa in contrahendo,” deliberately overlooking the fact that there were no errors in the prospectus that were causal for the claimants' investment decision and that “soft costs” are also unavoidable in the production and exploitation of feature films and documentaries.

German criminal lawyer on  investment fraud § 264a StGB

According to § 264a StGB, however, anyone who, in connection with the sale of shares in the results of a production, makes incorrect advantageous statements in prospectuses regarding circumstances relevant to the decision to purchase would eventually be liable to prosecution for investment fraud. The perpetrator must act intentionally with regard to all elements of the offense. In addition to knowledge of the existence of concealed disadvantageous facts or the inaccuracy of the information provided, this would also require that these circumstances were actually decisive for the decision to purchase the investment. Such a case is rare in film productions.