Saturday, June 5, 2010

Corbis Sygma Declares Bankruptcy In France

L'Agence Sygma, the renowned French photojournalism agency that was bought by Corbis a decade ago, has declared bankruptcy in response to a court judgment that found the agency liable for lost images of a photographer. But the storied history may not yet be over for this famous agency, which was renamed Corbis Sygma. The decision to declare bankruptcy rather than pay the court judgment raises many questions for former Sygma photographers whose images, in some cases, could continue to be stored or licensed by Corbis Corporation, the USA-based parent company for its French subsidiaries, Corbis Sygma and Corbis France.

In its article entitled "Photojournalism Agency Sygma In Receivership", Agence France Presse (AFP) reports that Corbis Sygma declared itself insolvent (bankrupt) following a court award of about $1.84 million to photographer Dominique Aubert, who created images from 1987 to 1995 for licensing via Sygma. The court concluded that 750 of his 250,000 images had been lost by the photo agency.

AFP quotes Stefan Biberfeld, the managing director of Corbis Sygma, as saying "It is impossible to pay my creditors". Corbis Sygma has lost money each month for ten years, losing 2 million Euros in 2009 with a total loss of 73 million Euros since Corbis Corporation acquired L'Agency Sygma in 1999, according to Mr. Biberfeld. As a result of the bankruptcy, Corbis Sygma's 29 remaining staff have been fired. Corbis Corporation is owned by Microsoft founder Bill Gates.

It is perhaps ironic that the court judgment is the result of the appeal by Corbis Sygma of an earlier court decision, which awarded a reported 102,000 Euros to Mr. Aubert, less than one-tenth of the current judgment. Mr. Aubert's accomplishments while with Sygma included his coverage of Afghanistan and Lebanon and winning World Press and other awards. His complaint began about 8 years ago. After leaving Sygma, Mr. Aubert became an airline pilot, where he has been employed during much of the appeals process.

In excerpts from a statement by Dan Perlet, the Director of Communications for Corbis Corporation, Corbis said, "We have attempted to bring lost images cases to a fair and reasonable conclusion. However, in a recent lawsuit by a photographer in France, a court awarded damages against Sygma for 1.5 million Euros, an amount that is immensely disproportionate to the revenue opportunity with the images. Given this legal decision, previous decisions, and other likely future lawsuits, we have come to the conclusion that it is no longer possible to maintain Sygma ... We have communicated to our French clients and plan to continue to serve our advertising and marketing clients normally, as well as select media and publishing clients. This has no impact on operations outside of France. We are also working to continue our preservation efforts for the photography, including maintaining the Sygma Access and Preservation Facility, and will continue to offer a Sygma photo collection on the Corbis website."

Speaking through his attorney, Dominique Aubert objects to the characterization that he is responsible for the bankruptcy of Sygma, pointing out that the large judgment is not only for the lost photos, but also for the unauthorized copying and licensing of 1,000 of his images via a Corbis web site. He breaks down the judgment as being 1,299 Euros for each lost original select image plus 199 Euros each in punitive damages, combined with 399 Euros for each image that was scanned and placed online without permission. (1 Euro = about $1.20.)

The attorney's statement says in part, "Contrary to what Corbis Sygma contends, Dominique Aubert never asked for the return of his photographic works. He simply sought compensation for the loss of more than 750 original photos ('red dots'), including unique stories in Afghanistan, the loss of which definitively prohibits any use of his work, and for acts of infringement arising from the exploitation without his authorization of more than 1,000 of his other photographs on the Internet."

(Via his blog, Michel Puech has tirelessly provided the most in-depth coverage of recent French news photo agency events, including a detailed, moment-by-moment summary of the Sygma bankruptcy and a chat with Sygma founder Hubert Henrotte. Michel Puech's blog is one of the sources for this article.)

The history of Sygma has been a colorful one. The agency was founded in 1973 by Hubert Henrotte who led a group of dissatisfied photojournalists to split off from Gamma agency. Ownership changed hands a few times in the decades that followed Sygma's rapid rise. In 1987, 25% of Sygma shares were even owned by British publishing tycoon Robert Maxwell who later died mysteriously at sea and who was rumored to have been an Israeli spy. After Corbis bought Sygma in 1999, management had a difficult time with both its revenue and its photographers. Protests, strikes, resignations, firings and law suits have marked the 11 years since the acquisition by Corbis.

In the Corbis Sygma bankruptcy, a big unknown variable is the future status of the Sygma Preservation and Access Facility, located in Garnay, 45 minutes from Paris. Launched in 2009, Corbis paid many millions of dollars over several years to establish the this state-of-the-art, archival repository. (There is a "must see" video and promotional piece that Corbis produced about the Sygma facility.)

When asked about the status of this facility, a public relations person for Corbis Corporation explained that the Sygma facility is operated by Corbis France, which has 15 employees and which will continue to operate. Corbis intends to maintain the facility and preserve the work represented by Corbis Corporation. Some work is represented by the liquidator in France (as a result of the Corbis Sygma bankruptcy), and Corbis is working with the liquidator to determine the best way to either preserve that work or return it to those photographers who have requested it. (A logical interpretation of this would be that photographers should formally request the return of their images if they want them back. See the contact information further below.)

This Sygma Facility undoubtedly contains many "red dot" original select images (the best of the best) for Sygma and Corbis photographers. Since, in some instances, Corbis Sygma opted not to return all images that photographers requested when it was fully operational, it seems reasonable to assume that Corbis Corporation will not want to pay to return images post-bankruptcy. Reportedly, Corbis Sygma has up to 10 million images from up to 10,000 individual photographers. 876 of these have a contract with Corbis Corporation and are paid from the U.S.. (See the report by Michel Puench.)

Corbis France wants to continue to use the Sygma facility, which houses images related to a mix of various contracts and rights holders of various nationalities. It is possible that the French courts and government could have a strong opinion about the responsibility and outcome of co-mingling storage of images by an American parent company and its two French subsidiaries, one of which is bankrupt.

It is unclear what has or has not occurred since so little is publicly known. Amplified by this uncertainty, the Corbis Sygma bankruptcy raises many questions. For example, it is unclear to what extent Corbis Corporation might be held responsible for the past actions and obligations of Corbis Sygma, for the return of images under its control, or for future sales via Corbis of images that were formerly at Sygma.

Broadening the considerations, hypothetically, could a parent company from one country use contracts to shift benefits away from one of its wholly-owned subsidiaries in a different country, then bankrupt that subsidiary to eliminate its liabilities, and subsequently resume sales in that same country and elsewhere via a different subsidiary or other channel? And in the global age of the Internet, what role would the country of location of e-commerce servers play in all this?

There are many questions that could be raised as Sygma evolves into what might be its final phase of existence. The answers could conceivably have far-reaching implications for international trade agreements and business practices of cross-border conglomerates in the media space. At a minimum, it will surely be of great interest to the photo community.

For Photographers & Claimants

Over time, the Sygma archives have included images from Tempsport, Saba, Outline, Kipa, Stockmar, Apis, Universal Photo, Interpress, Spitzer, Reporter Associes, as well as from thousands of photographers. For photographers who would like to request the return of their images or anyone who has a claim against Corbis Sygma, you will likely need to formally file that claim with the French court. Nothing has yet been established for this purpose. But, a logical place to start is with these two points of contact.

The same court appointed administrator who handled the Gamma bankruptcy has been assigned to handle the Sygma bankruptcy. This court administrator, Mr. Stephane Gorrias, would likely be a good first contact for claims. If he is not ultimately assigned this task, he will likely know who else to contact and what procedure to follow. (In Gamma's case, the company emerged from a Chapter 11-type bankruptcy when a reorganization plan was presented by an early shareholder at Gamma, Fran├žois Lochon, and accepted by the court. For Corbis Sygma, this is a total bankruptcy with, perhaps, no recourse.) To contact the administrator:

Stephane Gorrias
1 Place Boieldieu
75002 Paris, FRANCE

For American photographers and those who once worked from Sygma's U.S. offices or those with contracts with Corbis Corporation or Corbis France, it probably would be a good idea to make the same request of Corbis. One option is to address your letter to the Corbis Legal Department and fax it to (206) 373-6100 or mail it to:

Corbis Legal Dept.
710 Second Avenue
Suite 200
Seattle, WA 98104 USA

(Editor's Note: This information is preliminary and may not be accurate. Seeking legal advice is always advisable on such matters. This is not legal advice. It's possible that there is not any action that will result in a desirable outcome since it is, after all, a bankruptcy. Some quotations and text in this reportage are translations from French and may not be perfectly accurate. And finally, the opinions expressed are not necessarily those of the author or publisher.)

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