As we observe VFX and animation studios springing up or expanding its branches, there’s an air of melancholy in one of the leading Canadian animation and visual effects studio. As reported by CartoonBrew, the studio behind LEGO Marvel Super Heroes: Avengers Reassembled!, Elena of Avalor, Robosapien: Rebooted, Arc Productions is permanently shutting down.
“We regret to inform you that Arc is experiencing significant financial difficulties and a liquidity crisis,” CEO, Tom Murray wrote to his staff in a letter. “Despite the very best efforts of management to find a solution to this financial emergency, we have not been able to resolve this matter with our lender.”
Arc Productions has shifted hands with many companies over the years. In 2004, USA animation producer IDT Corp. purchased the studio from the founders of DKP Studios and in 2006, Starz Media’s parent company Liberty Media bought IDT Entertainment. Under its new management in 2007, the studio began a “Starz Shortz” program which has produced Bundle of Joy, Enter the Sandbox, and in 2010, the studio opened a major VFX wing to create all the effects for the new Starz Channel/Graham King Productions miniseries, Camelot, Alcon Entertainment’s Dolphin Tale, and producer Avi Arad’s family feature, Robosapien: Rebooted.
In April 2011, finally, the Starz Animation was sold to a Canadian consortium, and renamed itself to Arc Productions. Throughout the years, the company has been awarded tens of millions of dollars in Canadian taxpayer dollars to operate.
Currently, Arc was in production on the feature Blazing Samurai, which is scheduled for release in August 2017 by Open Road Films and so far no word has come regarding what will happen to that project.
It’s unclear what went wrong at Arc, but it’s known that the studio was aggressively expanding its workforce earlier this year, and even unveiled a new logo in April. The first sign that something was wrong was last Friday when employees were told they weren’t being paid because of a “glitch.” Now, according to CEO Tom Murray, the company has no money to pay its artists anymore.
“We are still working diligently to find a solution that will allow us to pay outstanding wages due to you,” Murray wrote, “but, in the event that wages are not paid and the Receiver is appointed, there is a federal government program known as the Wager Earner Protection Program where employees of companies that have gone into receivership may be able to make a claim for unpaid wages, severance and vacation pay.” That program only pays up to $3,900 per individual.
Here is the full text of the letter that Murray sent to employees that explains how the lenders intend to take control of the company’s assets on 4 August.
