Very Naughty Boys [EBK]

  ‘I told him that most of his assets were in the films and properties, he hadn’t got any liquid capital. His portfolio was totally out of skew in the sense that he hadn’t got resources to meet his day-to-day needs, it was all in celluloid and properties. He also had no pension provision for old age. And then there was the contingent liabilities, the bank guarantees not shared with Denis. And also he’d personally given completion guarantees on films. But he really didn’t want to know and he virtually threw us out... even his old mate Ray. And that saddened me. I think he half-knew, he just didn’t want to hear the terrible news. Let’s face it, he had been the victim, as had all The Beatles, of bad practice by managers in the past. But he’d been warned by the Pythons, because they knew Denis and they’d left, they’d all got out. He was warned.’

  Harrison was to confront O’Brien about the issues raised that evening, but obviously any worries he had were laid to rest because O’Brien next hauled Reiss into his office where he accused the accountant of totally unwarranted allegations. ‘You’ve been speaking to George without my permission,’ he said. ‘How dare you!’ Then the following January Reiss was sacked.

  He’d been enjoying a day off and returned to the office only to be unnerved by the number of work colleagues looking at him with puzzled expressions. ‘I said, “What’s the matter?” And Kate Smith said, “Didn’t you receive the letter?” Apparently, a letter had been sent to me saying that my contract was terminated. Denis hadn’t got the balls to tell me to my face. So I realised what had happened. He wanted me out of the way. And I actually took him to court because I had a three-month notice period. The court case lasted about four minutes, the judge just threw it out because Denis had no case. He tried to raise all sorts of spurious arguments but he couldn’t say, “Well, m’lud, I fired this person for no good reason.” So judgement went in my favour.’

  There are many theories as to why the relationship between Harrison and O’Brien finally fell apart — David Leland opening Harrison’s eyes to the abuse his partner was regularly dishing out to the film-makers, the financial situation... and so on. Another theory is much more simple, and surprising given how much Harrison took a back seat in creative affairs, almost from HandMade’s inception. ‘George suddenly wanted to have more of a creative role in the film-making,’ Palmer says, ‘and, of course, Denis didn’t want anybody’s creative input, even George’s. Denis just didn’t want him involved. He wanted George to be a sleeping partner who took the kudos and stumped up the dosh. George was happy to be a sleeping partner for a long time, but his wanting to be more involved started with Shanghai Surprise. And that really did put a rift in the relationship and that was really the rocky road, when it began to unravel. That was the beginning of the end.’

  The initial chemistry between Denis O’Brien and George Harrison was magical, there was an alchemist thing happening. Unfortunately, the chemistry changed. ‘And for me,’ Cooper says, ‘it was an overwhelming feeling of sadness, not of anger or bitterness, but just sadness that such a wonderful situation had changed; but then all things change. Those last few years were difficult, you had to be a comedian every day, you had to keep the morale of that company up, in London especially because there was so much being done in America. This feeling of impotence was creeping in and I couldn’t allow that to be seen through me. It was like a divorce, except one party’s not telling the other party they want it and you’re left with that terrible taste in your mouth of “What have I done wrong?” Well, I did nothing wrong, none of us did anything wrong. Denis should have come down and said, “Listen, I love you all, thank you very much but the wind of change is on.” None of that was really stated. So I formed the film police, an underground movement of naughtiness which was hopefully very funny and played out in the office, in moments unseen to Denis. Anything to keep the morale in that office buoyant. But at the end of the day, it was impossible, the office became an extremely sad, desolate place.’

  Things were to go from bad to worse, especially for Ray Cooper, as people began to sense that, like Wendy Palmer and numerous others before her, he was working on borrowed time. ‘Clearly Denis didn’t like Ray being there,’ Reiss believes. ‘He’d obviously been quite involved creatively at the beginning. Denis just didn’t want him around because he was associated with the old regime.’

  After ten years as a director of HandMade, the end for Ray Cooper came in the form of a telephone call from O’Brien in America. There was no handshake. There was no goodbye. No thanks for everything you did. Nothing. ‘I ended up on the psychiatrist’s couch,’ adds Cooper. ‘It took me a long time to come to terms with it, in the sense of my own personal life. My psyche had been chipped away by O’Brien. I wasn’t aware of it at first... well, maybe I was, but I thought I could deal with it, but there was an undermining all the time. What I am sure of, is that Denis would have thrown me out years before if it wasn’t for the support of George.’

  So traumatised was Ray Cooper by how foully he was treated by O’Brien, that it wasn’t until the late 1990s that he involved himself in the movie business again.

  Though not the end, Ray Cooper’s departure was another substantial nail in the HandMade coffin. Shingles confides, ‘Ray going was very sad for HandMade. I think he was very unfairly treated. But we had great times. I remember one incident. We used to have production meetings on Wednesday. Denis, Ray, Kate, Wendy and myself, and others, too, we’d be talking and Ray wouldn’t be there and Denis would say, “Where’s Ray?” And someone would come up with a reason, but if you looked in Screen International and saw Terry Gilliam’s The Adventures of Baron Munchausen shooting in Spain, in the cast list was Ray Cooper. And we’d think, let’s hope Denis hasn’t looked.’

  It was when the banks stopped lending and instead started to pile on the pressure that the whole sorry house of cards built by O’Brien really began to tumble. ‘Once the shit hit the fan, we saw very little of Denis,’ says Shingles. ‘We used to have birthday parties for all the staff up in his boardroom. During the last one we had, there was a power cut, there was thunder and lightning, everyone was there that was left; very atmospheric. And that was it... you knew then this was the end somehow.’

  Looking back on the whole venture, there’s no way, even taking into account the two big early hits, Life of Brian and Time Bandits, that HandMade was a commercial success. ‘It must have been a massive financial disaster,’ Reiss believes. ‘It was a private business and the ownership of it and the films were spread about all over the place. People talk about HandMade, but HandMade didn’t really exist as such, it was a network of partnerships, distribution companies and so on. If it had been HandMade Pic and everything had gone into one company, it would have collapsed financially massively long before. It was only because it was spread about no one really knew.’

  Everything only came to a head when the banks finally sussed out that these films weren’t going to generate the income that Denis O’Brien had projected for them. One such bank seemingly blinded by all the showbiz razzmatazz was American Express in London. It was only after a change in management that they began to realise that perhaps this was a loan that should be called in. ‘American Express kept trying to chase Denis all the time,’ Reiss confirms, ‘and the Chemical Bank in America, a very experienced film banking operation, they began to get suspicious. And what Denis would do was to borrow from another bank, on another film, and use the money to pay off something else. He kept borrowing from one bank account to support another.’ Always to postpone the inevitable.

  And when the inevitable finally came and Harrison uncovered the truth, he was utterly devastated and $25 million in the red. ‘I know that George never forgave Denis,’ Eric Idle says. ‘He hated him with an intensity that was quite rare for George. He felt bitter, betrayed, angry and let down. In fact, he wrote a song called “Lying O’Brien” which he played me. It took him a long time to get over all that. I don’t think George was ever ready to relive a lot of that stuff. Then he lost
half a lung to cancer, and then half a lung to some fucking loony stabbing him. One of the last times I saw him, he said gleefully that Denis had been forced to sell his last house. But it was never the money with George, it’s about, “How could you deceive me... how could you use my good name?” I’m sorry that it worked out the way it did for George. One always hoped that Denis was on the level; you hope that they’re right. It turned out that he wasn’t.’

  14

  ‘I JUST HOPE DENIS DOESN’T TURN OUT TO BE A MADMAN’

  This quote made by George Harrison in a 1988 interview was prophetic indeed. But it wasn’t as if nobody warned him about it. As early as 1982, his Python mates were questioning O’Brien’s modus operandi and telling Harrison of their concerns. Eric Idle states, ‘George always said to me afterwards when he found out about it, he said, “Yeah, I know, you warned me, you warned me.”’

  Gilliam also warned him. ‘HandMade had really been rolling along based on George’s fortune that was tucked away somewhere and Denis was very clever at using that as equity to get more money to keep things going. So he played pretty free and easy with George’s money. It was an incredible power base for Denis. But George didn’t want to know until it was too late. In a way, you can’t blame him after having the hassles he’d had.’

  It is remarkable indeed that George Harrison did not learn from the lessons of his past, from the years of financial litigation with Allen Klein, who from 1968 to 1973 managed The Beatles’ affairs and was in charge of Apple Corps, The Beatles’ business vehicle. Klein and Apple were finally disentangled in 1977, but only after the company was placed into receivership. The man who replaced Klein as Harrison’s manager was Denis O’Brien. ‘One of the things that George always liked,’ says Idle, ‘was for someone to take care of things. He needed that, in a way, because he was an artist and if someone could take care of the business that was great. He worked on absolute trust, George, he always told the truth, he never lied, even when it was painful. So the idea that somebody would not be telling the truth to him didn’t actually enter his head. He was susceptible.’

  Since the release of Nuns on the Run, HandMade was still functioning but no longer making movies. It was in a strange sort of limbo, like a zombie walking aimlessly around the graveyard of the British film industry knocking into the tombstones of other departed film companies like Goldcrest and Palace. O’Brien and Harrison’s business association was finally dissolved in 1993. Then, in August 1994, HandMade was sold for $8.5 million, in cash, to Paragon Entertainment Corp, a Canadian media giant. The largely token sum indicated to many just how little the dormant company had come to mean to Harrison and O’Brien amid their increasingly acrimonious partnership.

  When he came to sell HandMade Harrison said he would only sign his name once. He hated what had happened and didn’t want to think about it. He would turn up to one meeting, and sign his signature, once. But the lawyers still produced twenty different contracts. Harrison refused to sign them. So the lawyers had to put them all together in one agreement. Harrison signed, and walked away.

  For many of the old staff, this was the end of an era. ‘There was Hilary Davis,’ Shingles recalls, ‘myself, Gareth Jones, a few others that were left, we were all up at HandMade physically moving out of Cadogan Square. George was there with Olivia helping to clear out, there were computers and bucket-loads of stationery to move. And we didn’t know what the future was. We arrived at the Paragon office and found out that we’d all been made redundant except Hilary and Gareth. They said, “Sorry, you’ve been made redundant, here’s your cheque, goodbye.” We were absolutely stunned and went back to what we called the HandMade pub, the Australian in Milner Street, which is where we used to go at lunchtime. We couldn’t go back to Cadogan Square because it had been sold, so we all sat in this pub and discussed what had happened. That was the real end of HandMade. It was sad because HandMade felt like a second home to me. My 14 years there were the happiest of my working life and this was a very sour end to what had been a wonderful time.’

  Although in selling the company Harrison had broken all ties with HandMade, his feud with Denis O’Brien was far from over. In January 1995, he filed a $25 million lawsuit against his former partner for allegedly mishandling his investments and deceiving him for 20 years. The entertainment world gasped.

  Harrison’s complaint was long (18 pages in length) and dramatic: ‘This case involves the tortious misconduct of a faithless manager. Pretending to serve the interests of his musician client, he misused his position and his client’s assets and credit to finance secret profit and a lavish international lifestyle for himself, while subjecting his trusting client to massive economic risks and losses.’ It also alleged that O’Brien ‘drastically reorganised Harrison’s financial and business holdings into a complicated, Byzantine structure, involving multiple offshore corporations and other inter-related entities all under O’Brien’s direct or indirect control.’

  The claim, which was lodged with the Los Angeles County Superior Court, also alleged that O’Brien encouraged Harrison to rack up massive debts to finance more films and that ‘he made secret decisions, concealed and misrepresented the facts and took actions contrary to Harrison’s wishes and directions, and through his improper and inept management caused the film organisation to lose huge sums of money’. The papers went on to claim that O’Brien told Harrison, ‘That in order to keep the film organisation as a going business it was necessary and advisable for Harrison personally to borrow massive amounts of money. Harrison did so, acting in reliance on O’Brien’s advice and thereby incurring personal liability in excess of $25 million.’ In conclusion, the papers stated that ‘Harrison suffered enormous losses and liabilities as a result of O’Brien’s improper and inept management and deceitful conduct’.

  Harrison also contested that O’Brien had backed out of a 1978 agreement to cover half of the losses incurred by HandMade. It was claimed that O’Brien ‘carefully avoided telling this to the lenders or signing any notes or loan documents’. It appeared that O’Brien bore none of the risks of film-making, yet half of the potential profits.

  In essence, the whole case hinged on the large sums of money Harrison had to borrow on behalf of HandMade and the personal guarantees with which he buttressed HandMade’s borrowings. According to court papers, it was these loans and guarantees that led to Harrison’s $25 million liability.

  John Reiss only heard about Harrison’s court action when he saw an article about it in the News of the World. ‘I wrote to George and explained why I was glad he was making progress against The Evil One and sorry he hadn’t listened to me in the first place and offered to help. And, in fact, I later gave a deposition to his solicitors.’ Harrison, it seemed, had taken Reiss’s earlier advice and had got independent people involved. He brought in Ken Roberts, an accountant at a medium-sized practice called Shipley’s, who specialised in the music industry and film, and one of the partners at Ernst and Young, Garth Tweedale, again a music specialist. ‘I think they both got the confidence of George,’ Reiss says, ‘and probably helped towards the end in assembling the information for the legal cases. But if only George had been persuaded to do all that earlier on.’

  Denis O’Brien, now a director and Vice-Chairman of Union Illinois Co Bank in St Louis, naturally contested the action and lodged a vigorous defence denying each and every allegation. Despite the belief of some professional analysts that an out-ofcourt settlement seemed the most likely outcome, it looked more and more certain that Harrison was going to get his day in court.

  One of the most interesting facts brought up by the case was that George Harrison still owed some of that $25 million figure to various creditors, putting him in the position that, if he were to lose and be forced to meet costs, his rock ’n’ roll lifestyle would be in serious jeopardy. The press speculated that if that were to be the case the former Beatle would be down to his last £10 million. Still bloody rich by normal standards, so not a huge outpouring of sy
mpathy, but when you think at the time that fellow Beatle Paul McCartney, after years of careful management, had an accumulated wealth in the region of £500 million, it was a sorry situation. And one considerably more serious than people might have imagined. According to Reiss, ‘O’Brien milked George directly or indirectly in every conceivable way possible that I believe George would have become bankrupt. It was only the launch of The Beatles’ albums on CD in the early Nineties that came to his rescue. A big flood of money came in and also later with subsequent Beatle re-releases. So I imagine he died a wealthy man, but he wouldn’t have done had his fortune been wiped out at that stage, which wouldn’t have been very nice and he didn’t deserve it because he was an honest, decent man. I think he was taken advantage of horribly.’

  Despite Harrison’s London solicitors succeeding early on in the case in obtaining important documents from O’Brien’s EuroAtlantic office in Guernsey, it wasn’t until January 1996 that judgement was passed in Harrison’s favour and he was awarded $11 million in compensatory damages in the Los Angeles Superior Court, roughly half of what had been originally claimed. The judge’s ruling hinged on Harrison’s allegation that O’Brien had contractually assumed personal responsibility for half of any debt incurred by HandMade, but concealed that information from lenders, did not sign any loan documents and, in fact, assumed none of the losses himself. Afterwards, a spokesman for Harrison said that, although his client was pleased with the decision, ‘Winning’s one thing, collecting’s another.’

  During the case, O’Brien went to extreme lengths to stave off the inevitable financially. ‘When I later met Noel,’ Reiss remembers, ‘Denis’s former wife, I heard that Denis had even used her personal house in New York as some sort of security, probably to hold up a crumbling empire, and she was trying to get that back so she could actually either live in it or sell it. But I think it had been charged as part of the settlement by the court order in favour of George.’