Mac Parker’s lenders miffed at state inquiry
MIDDLEBURY — A state investigation concerning the financing of a full-length film by well-known Addison resident Malcolm “Mac” Parker has been misconstrued, says a spokesman for a group of lenders who support Parker’s project.
“First and foremost, we are strongly opposed to what the state is purporting … that he (Parker) is selling securities and that he is not licensed to sell securities. Both complaints are completely groundless,” said Vergennes resident Christopher White, a lender and spokesperson for a group of supporters who have established a legal defense fund on Parker’s behalf.
“The very contracts we have signed state in black and white that we were not buying shares in the film, had no say in the making of the film, and that the payments were not dependent on the success of the film or even the completion of the film,” White continued, adding that he had been in contact with more than 100 other lenders and “no one has expressed any dissatisfaction with the way Mac has handled this project or dealt with the finances. To a person, everyone I have talked with has recognized that these were loans to Mac to help him do his work.“
The State Department of Banking, Insurance, Securities and Health Care Administration, however, has confirmed that investigators are looking into whether Parker violated state law in the way he solicited financing for a movie called “Birth of Innocence.” They also have been clear that no allegations of wrongdoing have been filed.
“It’s selling an unregistered security by an unregistered person” the state is concerned about, Paulette Thabault, commissioner of the department, told WCAX in a Tuesday night report that portrayed the financing arrangements in a questionable light supporters considered highly unfair.
“It’s just rubbish,” White said, concerning any allusion that the financing was suspect or deceitful. “Anyone who knows Mac knows he is the salt of the earth … Everyone of the 100-plus people I have talked with over the past six weeks has said, without exception, that they have rarely met a man with such integrity.”
The state filed a complaint in Superior Court in Montpelier based on the premise that the loans were securities, that he offered to repay lenders 12.5 percent to 15 percent interest on those loans, and agreed to pay some lenders up to 30 percent interest. The state alleges the transactions were “investment contracts” and alleges Parker owed “approximately 10 million dollars in principal and interest from the sale of securities to approximately 200 investors, individually investing amounts ranging from $100 to $500,000.”
Parker, who gained fame in the 1980s and 1990s as a Vermont storyteller entertaining crowds at festivals as well as creating a video that introduced children to farm life in Vermont, has spent the past 10 years working on the film and offered a written statement in his defense.
“I have borrowed money to make a beautiful film called ‘Birth of Innocence,’” he wrote. “This is not a scheme, and I have no intention to deceive or violate anyone. I have made an absolute commitment to repay all loans made to me, and I remain steadfast in that commitment.
“I have always considered these loans,” Parker continued, “and had no idea the state might consider them securities. The state raised these questions, and I have acted with openness and cooperation to support their investigation. I dismantled my Web site at their request. I have assured them I will work to bring myself into compliance with all regulations, if violations are found.”
Parker’s attorney, Wanda Otero-Ziegler, who works with the law firm of Langrock, Sperry & Wool in Middlebury, emphasized the state’s complaint has “no indication of wrongful intent on his part or any criminal allegation.”
She maintained that the agreements with lenders, which Parker had drafted without the help of an attorney, may have used faulty language but clearly stated in essence that the transactions were loans with a guaranteed payment of interest.
The agreements were essentially “promissory notes,” Otero-Ziegler said, because there was an “unconditional promise of repayment with interest” regardless of the film’s success or failure. A promissory note, or loans, would not fall under the state’s jurisdiction and, therefore, Parker would not be in violation of state law.
Otero-Ziegler explained the distinction between a promissory note and a security is that a promissory note establishes an “unconditional promise to pay” with a fixed interest rate and a fixed term of payment, all of which were in Parker’s agreements with his lenders. Investments are dependent on the success or failure of a particular project or stock and are tied to performance.
Otero-Ziegler said her client and his supporters were not troubled that the state was looking into the financing, but they have objected to the recent turn of events in which the state has taken a more aggressive stance by freezing Parker’s assets and putting his project on hold. “They have a responsibility to enforce the regulations and a right to look into this activity,” she said, but added their recent actions have been more harmful than helpful.
“No one benefits if this project comes to a grinding halt,” Otero-Ziegler said, adding that the film is near completion and all that the lenders want is for the state to drop the pretense it is defending their interests and to let Parker get back to work.
“It really rankles me, and a lot of lenders, that the state says it is representing my interest as a lender,” White said, adding that nothing could be further from the truth. “To say the state’s intention to protect the lenders is a contradiction is a gross understatement. What they’re doing is a huge disservice.”
LENDERS OFFER SUPPORT
White said lenders heard of the state’s investigation in a December update to lenders from Parker, and that lenders were supportive of Parker’s effort to come into compliance with any state regulations deemed necessary to complete the project. When investors learned of the state’s intent to file an official complaint, a legal defense fund sprung up organically and has grown significantly in the past several weeks.
“What became quickly apparent was the outpouring of support for Mac by all these various supporters of the project,” White said, noting that he has been in the unique position of being in contact with more than 100 of them in the past several weeks. “We all think the state has overstepped its bounds and that we are not being represented by the state’s viewpoint … We view the state’s role in this as highly inappropriate …. The state is so far off the mark that it is almost laughable, if it were not for the fact that the state agents involved are devaluing the greatest asset we have (Parker), and that detracts from the very real value he is creating.”
Ironically, the film Parker is creating speaks directly to the human condition, overcoming hardship and obstacles and realizing the full potential of one’s life, says White.
“It’s a very compelling and powerful film… It has a message, at a time when people are feeling disenfranchised and there is a lot of trepidation in the world, that is very relevant and uplifting.”
White characterized the majority of the lenders he has talked to as friends, family and neighbors of Parkers and said they have all expressed frustration with the state’s actions.
“These people have recognized the inherent value of the film and believe in the person who is piloting this project … To know Mac is to know how ridiculous (the talk about speculative schemes are)… these are his neighbors, friends and relations who are working with him on this project … If we were to believe the state we would be outraged; instead his supporters, those who have loaned him money, are circling the wagons around him.”
Parker, meanwhile, just hopes the state will let him finish his project without undo legal expense and delay. “I am asking for the time and freedom to finish (the project),” Parker wrote, “and to honor my promises to all the good people who are supporting this project.”