History of the DEFA and the DEFA Foundation

for DEFA (Deutsche Film Aktiengesellschaft) 1946 - 1990: Facts and Dates click here

by Wolfgang Klaue

A side note of history, who is still remembering this: As soon as 1990 there has been a DEFA Foundation. What has become of it?

As one of its last legal acts on September 25, 1990 the last GDR-government passed a law to found the DEFA Foundation. A few days later, the Minister of Cultural Affairs appointed a foundation council. After October 3, 1990, this DEFA Foundation died a slow death. It suffered from its inherent defects and ceased to exist without having an exact day of death.

Due to its obscure business activities and some dubious contract conclusions the DEFA Foreign Trade became the center of criticism by the DEFA filmmakers right after the wall came down in 1989. The Minister of Cultural Affairs decided in spring 1990 to liquidate the DEFA Foreign Trade. The Foreign Trade’s capital, that is the foreign exploitation rights of DEFA films and the property Milastraße, had been transferred to the DEFA Foundation by the law mentioned above.

As it turned out after the few months of its existence, invincible obstacles were put in the way of the DEFA Foundation of 1990:

  • The rights of the Foreign Trade had been assigned to the foundation, that is the foreign exploitation rights of DEFA films. The old federal states were a foreign country.

The national rights, that is the rights for the new federal states, remained with Progress. How this construction was supposed to work remained unanswered;

  • The property of the Foreign Trade seemed not to be liable for restitution in 1990. That was a mistake as it turned out later;
  • The DEFA Studio for Documentary Films had cancelled its contracts with the DEFA Foreign Trade and reassigned their foreign exploitation rights to the studio. By submitting an elaborate opinion of a prestigious West-Berlin attorney’s office this step was confirmed and, at the same time, fundamental doubts about the legitimacy of a DEFA Foundation were announced;
  • The legal cardinal error: the GDR-DEFA-Foundation had the status of a foundation under public law. The Berlin Foundation Law does not include this kind of legal form for foundations in Berlin. A formal approval of the DEFA Foundation was thereby not achieved after October 3, 1990.

The GDR-DEFA-Foundation failed within the first months after reunification due to the mistakes made during its creation.

Though, the basic idea of forming the foundation remained, and was respected also in the following years by the Trust Agency and the federal authorities. The rights of films from four decades of DEFA production had not been disposed to private hands during the privatization of the studios. The Trust Agency assumed those rights and authorized PROGRESS film distribution, Ltd. as a company held in trust to exploit the films.

The second birth of the DEFA Foundation

Nine years passed by until the second birth of the DEFA Foundation. A long, very long time. But as the fears and frustrations during the privatization and liquidation of the DEFA companies grew, the public pressure to create a DEFA Foundation declined. In addition, the Trust Agency did not see any acute need for action as well. Progress operated in the red. Not before the privatization of the distributor had been put on the agenda in 1995/96, intense preparations for the founding of the DEFA Foundation began.

The basic concept links to the GDR-version and adapts to the new realities and knowledges: The Trust Agency assigns the rights of the DEFA film stocks to the foundation. The foundation grants the exclusive exploitation rights to PROGRESS film distribution, Ltd. The relationship between Progress and the foundation needs to comply with three requirements:

  • the jobs, existing at the time of privatization, have to be preserved
  • the foundation has to maintain an adequate part of the reserves, that result from exploiting the DEFA film stocks, to support German film culture and to serve the Foundation’s purpose
  • the economic relations between Progress and foundation have to provide an incentive for the distributor to work with DEFA Films

The further you go into the matter, the more often the devil is in the details. In need of clarification are, among others, the following problems:

The DEFA film stocks totals:

It needed to be clarified, that all rights having been resulted from the production and distribution process are assigned to the future foundation. In expert opinions on preparing the foundation dubbing rights and the non-temporary acquired exploitation rights from foreign films on the borders of the GDR remain unmentioned as well as the productions of the Studio H & S and the non-released materials. It was also necessary to clearly notice that not all the rights of the films produced in the studios can be assigned to the foundation. Productions which had been commissioned by television and other clients  were excluded.

The coherence of the DEFA film stocks:

There were perfectly plausible reasons that efforts were made to split parts of the DEFA film stock rights like newsreels and political propaganda films to use them independent from an exclusive exploitation of the DEFA film stocks.

The chain of rights

Contracts upon the privatization of the DEFA studios arranged that the rights of the films produced in the past are not subject of disposal. There was no right to sue (Aktivlegitimation) created that vested the rights in the Trust Agency. This "chain of rights" had to be created in order to equip the foundation free of doubt with all the rights that are necessary for a non-limited exploitation of the DEFA film stocks.

The concept of privatization

It was checked if there were any other alternatives than to dispose Progress to a private  partner. The concept of a Unternehmensträgerstiftung, that is that the foundation itself owns the PROGRESS film distribution, Ltd., was checked and approved to be a perfectly operative idea.

Questions of ownership

The ownership structure of the film material was not arranged during the GDR times. It was not stipulated whether the film material of the DEFA film stocks stored at the archive was owned by the archives, the distributor, the studios or the laboratories.

It was decided to assign the physical property of the DEFA film stocks to the Federal Archive.

Legacy (Altlasten)

It was important to analyze what problems originated from the past the new DEFA Foundation and the privatized PROGRESS film distribution, Ltd. could be confronted with. It was not possible to impose the financial consequences to cope with those legacy on either the Foundation or on Progress.

A so-called "legacy concept" listed the problems that were not completely solved after the privatization of the studios and the liquidation of other facilities of the GDR film system. Those problems were:

  • to provide a set of rules in dealing with films from East-European countries
  •  to lay out a library of the right stocks on the basis of consigned contract documents
  • to analyze the documents consigned by Progress and foreign trade to hand it over to the federal archive
  • to develop a system of the documents from the studio for animated film and the studio for documentary film already stored at the Federal archive
  • to provide a set of rules in dealing with the DEFA filmcopies that remained in embassies, cultural institutes and Societies of Friends in foreign countries after October 3, 1990
  •  to provide a set of rules in dealing with open legal problems with contractual partners of the former DEFA foreign trade
  • to apply for legal protection of DEFA films in the US
  • to potentially settle copyright problems
  •  to produce broadcast material and new viewing prints

It took time to debate and communicate and to reach a consensus on the problems mentioned. And those points have by far not been the only subjects in need of clarification.To consult authorities, Stiftungsaufsicht and the local tax office were as essential as to prepare the foundation organs and the functions and operations of the foundation. On December 6, 1998 it finally happened: on application of the trustor - Bundesanstalt für vereinigungsbedingte Sonderaufgaben and Federal Republic of Germany, represented by the Commissioner for Cultural and Media Affairs - the Senate of Justice authorized the DEFA-Foundation. On January 28, 1999 the foundation council met the first time and passed the resolution on the property and resources of the DEFA-Foundation.

Statement by Commissioner Dr. Michael Naumann

Statement by Günter Himstedt