· The week started with ex-Miramax/present Film Department topper Mark Gill declaring at length to LA Film Festival attendees that, "Yes, The Sky Really is Falling":

The marginally good news is it won't hit the ground everywhere. The strongest of the strong will survive and in fact prosper. But it will feel like we just survived a medieval plague. The carnage and the stench will be overwhelming.

Of course, it's fashionable to bitch in the independent film world. It's what we do. We brood. We wear black. We drink too much coffee, followed by too much alcohol. And we bemoan a future devoid of real culture, homogenized to death by unfeeling conglomerates, and increasingly determined by ADD-addled 14-year-olds with nothing but internet porn and Grand Theft Auto on the brain.

Gill tried to end on a positive note ("If you really want to make movies—even after all the unvarnished bad news I've dumped on you today—then by all means do it"), but by then the place looked like Jonestown. By most accounts around the festival this week, it still does.

· Production on Nailed shut down for the fourth time as David Bergstein's Capitol Films once again failed to meet payroll on the set.

· Capitol's sister company, ThinkFilm, is on the defensive against director Alex Gibney, who initiated a lawsuit to reclaim his Oscar-winning documentary Taxi to the Dark Side. They hate each other — in public.

· Variety's resident indie coroner Anne Thompson counts off more dumb money in various stages of decompostion, including Philippe Martinez, Sidney Kimmel and Crash financier Bob Yari.

· Edgy horror and foreign-fare distributor Tartan Films shut its doors permanently on Thursday.

· Toby Emmerich has downgraded from a Mercedes to a Lexus hybrid. Indeed, repent — the end is near.

[Photo Credit: IndieWIRE]

Emmerich, 45, will report directly to Horn, who will have final authority on the six or so movies New Line will produce annually. However, Emmerich will have at his discretion a fund of about $25 million to buy scripts, option books and hire writers. He will also work closely with Warner's motion picture group President Jeff Robinov. ...

"The assimilation of New Line under Warner's umbrella isn't happening in a cliff-like way," Horn said. "There will be a period of transition." Nonetheless, Horn noted, "it's fair to say the reduction will number in the hundreds."

Those hundreds will likely include marketing head Rolf Mittweg and distribution chief David Tuckerman, while Emmerich will oversee a streamlined crew left behind to steer '08 "highlights" including Harold and Kumar Escape From Guantanamo Bay and Sex and the City: The Movie (the latter of which, of course, has its early red-band campaign well underway).

What little dust remains to settle — besides the over/under on the duration of the messy Hobbit lawsuit — involves New Line's boutique shingle Picturehouse and Warner's own art-house subsidiary, the flailing Warner Independent Pictures. The smart money these days has WIP folding into Picturehouse, with president Bob Berney sticking primarily to acquisitions and WIP boss Polly Cohen designated for assignment. We see the rationale here, but we'd also like to hear any tips if you know otherwise.

• Warner Bros. moves to shrink New Line [LAT]