Terry Gilliam’s “The Adventures of Baron Munchausen,” a live-action fantasy being shot in Spain and Italy, has been shut down by the film’s financial bonding company, amid rumors that a new

director is being sought to replace Gilliam. “They’re trying to fire me, there’s no question about that,” said Gilliam, in a telephone interview from Cinecitta Studios in Rome. “They say

they have two directors waiting in the wings.” Gilliam said “The Adventures of Baron Munchausen,” which he co-wrote with Charles McKeown, has been shut down for two weeks while he and West

German producer Thomas Schuhly and representatives of Film Finance Corp. work out details for completing the film. “Munchausen,” a $23.5-million project, has 12 weeks remaining on a 17-week

of the Rose,” described the situation as “very critical,” but added that he was trying to convince Film Finance not to bring in a new director. Officers of Los Angeles-based Film Finance

didn’t return calls seeking comment. Schuhly and Gilliam declined to discuss specifics of the financing of “Munchausen” and their current problems, but sources close to the project say Film

Finance agreed to bond the movie (guarantee its financiers that it will be completed on time and on budget) for $23.5 million. Sources broke down the budget this way: Columbia Pictures put

up $12.5 million for the worldwide theatrical rights (excluding Italy); RCA-Columbia put up $8 million for the video rights, and Italian investors put up $3 million for all Italian rights.

Rumors of production problems on “Munchausen” have been circulating for weeks. A source at Columbia said that Film Finance had, in fact, offered Gilliam’s job to Gary Nelson, who directed

“The Black Hole” for Walt Disney Studios. Nelson reportedly turned the offer down because he would not have adequate preparation time. David Puttnam, the outgoing Columbia chairman who

green-lighted the project, said Monday that what he has seen of “Munchausen” is “stunning.” He said he told Film Finance that he had committed Columbia “to a Terry Gilliam movie” and that if

he is replaced, the studio has the right to turn the whole thing down. “The idea of having a Terry Gilliam film without Terry Gilliam is ludicrous,” Puttnam said. Schuhly said the

changeover in administrations at Columbia has left him with no one to talk to. He said he has tried to reach Victor Kaufman, the Tri-Star Pictures chairman who is about to head up

Coca-Cola’s new Columbia Pictures Entertainment, but that Kaufman has not returned his calls. Kaufman’s office referred The Times to Ronald N. Jacobi, general counsel of the parent Coca-Cola

Co.’s Business Entertainment Sector. Jacobi said it doesn’t matter to Coca-Cola or Columbia whether “Munchausen” is over budget because the film is a “negative pick-up” deal. In a negative

pick-up, a studio commits to pay a fixed fee for the right to distribute the film. Jacobi said that Columbia is not participating in the meetings this week in Rome. He said the studio is

required to pay its fee only if the movie is made “in strict compliance” with contracts; but he wouldn’t go beyond that to say whether Columbia would accept a change in directors. Gilliam

said that Film Finance notified him last week that it was suspending production for two weeks after the monthlong location shooting near Zaragosa, Spain. Construction crews are still working

on sets in Rome, he said, but the cast and the rest of the crew are on hiatus. There was also a mid-production shutdown on Gilliam’s last movie, “Brazil.” In that case, Gilliam called the

halt himself when he saw he was going to run over budget. “Brazil” eventually was completed for less than its $15-million budget. But Gilliam then got into a protracted dispute with

Universal Pictures over the editing of the film. Besides the budget over-run, “The Adventure of Baron Munchausen” is also facing the prospect of a legal dispute with independent producer

Allan A. Buckhantz, who owns remake rights to a 1942 German movie also titled “The Adventures of Baron Munchausen.” Buckhantz previously received a producer’s credit on MGM’s

“Victor/Victoria,” a movie that was based on another German film to which he owned rights. Buckhantz said he submitted a Munchausen script and other materials to Columbia in 1985, nearly a

year before Puttnam took over the studio. Buckhantz said that last March, while Puttnam was in charge, Columbia informed his attorney that it didn’t intend to proceed with his Munchausen

film and that it had no other Munchausen deal pending. Three months later, in June, Columbia announced its backing of Gilliam’s film, saying that it was based on materials that are in the

public domain and not subject to copyright protection. Stanley Caidin, Buckhantz’s lawyer, said his client may file a copyright infringement lawsuit if Gilliam’s completed “Munchausen” has

any material in common with the German film. Caidin said that Columbia is already violating Buckhantz’s rights to the title, “The Adventures of Baron Munchausen,” and that it has unfairly

impaired Buckhantz’s chances of making a “Munchausen” film. MORE TO READ