It was cute way back yesterday when we heard that Werner Herzog and Nicolas Cage are remaking Bad Lieutenant for a new generation of prurient cinephile wonks, but the novelty of Herzog's random-arse pairings requires a certain period of recharging to retain maximum effect. Which is perhaps why the potency of his other forthcoming, newly announced collaboration with David Lynch (!) on "a horror-tinged murder drama" doesn't have us positively reeling with anticipation.

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All the drama affecting David O. Russell's new film Nailed settled down a bit Monday when production resumed on the South Carolina set. But while the producers squared away their money issues with SAG, which shut shooting down last Friday, our own suspicions about precariously-budgeted distributor ThinkFilm got another look from Variety yesterday afternoon:

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We can't imagine how or why, after the ordeals of Three Kings and I Heart Huckabees, trouble could possibly find its way back to the set of a David O. Russell film. Alas, there it is — or, was, rather, in South Carolina, where only three weeks after resident cookie-choking expert James Caan quit the project, both the Teamsters and IATSE are grumpy and SAG reportedly shut production down because of "insufficient funds on deposit with the guild." And that's just the beginning, writes Nikki Finke:

Rumours also are circulating that the state of South Carolina could withdraw its incentive monies because of the financing problems. Filmmakers hope to resolve the cash crunch and re-start shooting next week since principal photography is only at the halfway point. "I am confident we will finish," an insider on the pic just told me. "The financing on this like most indies is based on bank loans and bridge loans. This is a matter of waiting on the bridge loan. Hopefully, it will all be resolved."

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As first foreseen here last week, bad news rolled into Picturehouse HQ today in the form of a batch of pink slips. Warner Bros, is shuttering the art-house/indie/foreign distribution arm in the wake of its belt-tightening at Picturehouse's parent company New Line; we're a little more surprised, however, to read that Warners is also closing shop at Warner Independent Pictures. We knew Jeff Robinov and Alan Horn were unhappy with the boutique business, but Jesus. Picturehouse chief Bob Berney and WIP boss Polly Cohen, tagged for a possible (if implausible) power-sharing arrangement as recently as last week, are both being shown the door, as are both offices' staffs in New York and Los Angeles. We'll be following up later with word on that rumoured independent venture of Berney's, but in the meantime, the full press release from Warner Bros. follows after the jump.

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A few notes kicked under the door at Defamer HQ hint that the end may be near for Picturehouse, the Oscar-winning art house shingle plunged into limbo in February after its parent company New Line was absorbed by the Warner Bros. mothership. We have yet to hear where company president Bob Berney will wind up, though a popular rumour has him sharing power at Warners' other struggling boutique outpost, Warner Independent Pictures, with current WIP boss Polly Cohen. We posit at least one more underdog alternative as well — plus a prognosis for the remaining Picturehouse output — after the jump.

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