The tiny outfit that has sold stock based on the promise that it will build the nation’s biggest movie-making compound near Savannah failed to previously disclose as required that its chairman had sought bankruptcy protection for another business he led.
FONU2, which also goes by the name Moon River Studios, reported in a regulatory filing in January that none of its top leaders had led companies that filed for bankruptcy protection in the last decade. The filings are supposed to give investors a true picture of the financial standing and risks associated with publicly traded companies.
But earlier this month, an AJC Unofficial Business column detailed a litany of worries about FONU2 and its chairman, Jake Shapiro. The piece mentioned Shapiro’s business track record, including how he had led a California wine company that filed for bankruptcy protection. When asked in an interview, Shapiro confirmed the bankruptcy filing to the AJC.
A few days after the column ran, FONU2 finally amended its 10K annual filing with the Securities and Exchange Commission to disclose the bankruptcy. That was eight months after the original filing.
In the meantime, FONU2’s stock price has plummeted, though the company says it is making progress on plans to build a sprawling production compound in Georgia’s Effingham County off I-16. The site is public land under lease from Effingham’s industrial development authority. None of the buildings have been constructed so far.
On Thursday evening, Shapiro had a statement emailed to the AJC. In it, he stated that the company “recently discovered that a bankruptcy filing in 2007 was unintentionally not disclosed in the Annual Report. Within one business day following such discovery, the Company corrected and amended its Annual Report.”
In recent days, FONU2 disclosed that is has received notice that it is in default on its payments tied to acquisition of lighting equipment, cameras and other gear it had said were important in its quest to make movies. The company said that it “expects the default to be cured shortly.”
Find out more about the company, Shapiro and their plans in the AJC’s earlier Unofficial Business column on myAJC.com.