Ailing Qintex Entertainment Predicts ‘Substantial’ Loss

Qintex Entertainment Inc., a television production and distribution firm that recently filed for bankruptcy protection, said Wednesday that it expects to report a “substantial loss” for the fiscal year ended July 31 when it releases its fourth-quarter earnings within the next two weeks.

The Beverly Hills-based firm, 43% owned by Qintex Australia Ltd., said the anticipated loss stems mainly from reductions in the value of some assets following its Oct. 19 filing under Chapter 11 of the U.S. Bankruptcy Code. Qintex Entertainment wants to shield certain assets and its subsidiaries--Hal Roach Studios Inc. and Qintex Productions Inc.--while developing a reorganization plan.

Qintex made the bankruptcy filings after failing to pay MCA Television Ltd. $5.9-million owed under a film distribution agreement. The agreement covers Qintex’s distribution of MCA-owned television programs “Leave It to Beaver,” “McHale’s Navy” and “The New Leave It Beaver.”

The firm said it has had to lay off 31 of its 80 employees as a result of the bankruptcy.

Formed April, 11, 1988, Qintex is known for co-producing the miniseries “Lonesome Dove.” For the nine months ended April 30, the firm had net income of $3.7 million on $76.8 million in revenues. Results for the final quarter will be released by Nov. 29.

The bankruptcy was another sign of trouble at Qintex Australia Ltd., which owns 43% of Qintex Entertainment stock. The Australian Qintex has experienced financial woes since the Oct. 10 collapse of its $1.5-billion deal for MGM/UA Communications. The deal was scrapped when Qintex failed to find the funding for a $50-million down payment.

The Australian firm earlier this month surrendered rights to buy one of the two parcels of land in southern Orange County where it planned to build a large resort.