April 2 (Bloomberg) -- “Rebecca,” the Broadway musical-in-storage that grows ever more expensive, has attracted the attention of the U.S. Securities and Exchange Commission.
Based on a murder mystery by Daphne du Maurier, the musical has been buffeted by two postponements and attracted an assortment of characters worthy of their own drama.
At the center is Ben Sprecher, a New York producer hoping to score with this Austrian concoction of Sacher-Torte tunes and mammoth sets. The show has been produced in Europe with varying degrees of success.
“The SEC subpoenaed all of our files,” said Ronald Russo, a lawyer for Sprecher. “I have no concerns about this.”
The commission is trying to determine whether Sprecher misled a prospective investor, Larry Runsdorf, said Jeffrey Lichtman, a lawyer who has spoken with the regulator.
Lichtman represents the show’s former press representative, Marc Thibodeau, who is being sued by Sprecher for defamation and breach of contract.
Runsdorf decided not to invest $2.25 million in the show after receiving an anonymous e-mail saying “the walls are about to cave in” on the production. Thibodeau later admitted to having written the e-mail.
The SEC is investigating whether Sprecher “made misrepresentations to Larry Runsdorf, either by commission or omission,” Lichtman said. The producer, said Russo, is an innocent victim of fraud.
Sprecher and his producing partner, Louise Forlenza, have been short a few million every time the show approaches a Times Square opening.
At this point, the budget has grown from about $14 million, including a reserve fund, to as much as $16 million, Sprecher said in an interview.
He needs to raise about $7 million more, he said, if it’s to open this year.
“Restarting a musical isn’t free,” he said, citing storage costs for sets, repeatedly loading them into the theater and forfeiting bonds to Actors’ Equity and other unions, among other expenses.
The SEC investigation adds to Sprecher’s woes, which escalated when he hired Mark Hotton, a former Oppenheimer & Co. broker, to raise money. Hotton strung him along with invented investors and was later charged in federal court with wire fraud. (He has pleaded not guilty.)
Kevin Callahan, an SEC spokesman, declined to comment. Runsdorf didn’t return calls.
Sprecher remains intent on producing the show. The Rebecca Broadway LP company has raised $5.7 million, according to a Feb. 26 filing with the SEC. An additional $2 million is in escrow, he said, available as long as he raises enough to open. He and Forlenza are prepared to invest a total of about $1 million of their own.
They continue beating the bushes for angels. Barbara and Philip Sellinger, both lawyers, hosted a March 11 backers’ audition at their home in Convent Station, New Jersey, 33 miles west of Manhattan. About 100 people attended, Barbara Sellinger said. Four originally cast members sang a short medley from the show.
Barbara Sellinger is investing in it, as she did in “A Tale of Two Cities,” a $16 million flop that closed after 60 regular performances in 2008.
“You have to look at each thing individually,” she said. “Just because you’re involved with one show that didn’t have a long life on Broadway, it doesn’t mean you can’t be involved with another show.”
“Rebecca” will be “phenomenal,” she said. If it ever sees the light of a New York day.
Muse highlights include Jeremy Gerard on Tom Hanks’s Broadway debut and Daniel Akst on books.
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