Village Roadshow, the troubled indie producer and financier of The Matrix, Joker and more, filed for Chapter 11 in a Delaware court, citing ongoing arbitration with long-time partner Warner Bros. as well as an overly ambitious studio expansion.
The company said it tried to sell itself last year but uncertainty surrounding the pending arbitration made that impossible, forcing it to file for bankruptcy.
“The WB Arbitration has caused the Company to incur more than $18,000,000 in legal fees, nearly all of which remain unpaid, and presents the threat of a potential arbitration award that could flatten the Company’s balance sheet, but that is not the full extent of its impact,” West Hollywood-based Village Roadshow said in its filing today.
The company said it “historically enjoyed a prolific co-production, co-financing, and co-ownership relationship with WB, which included the production, ownership, and derivative rights flowing from 89 titles – including the Matrix franchise – and comprised the vast majority of the Debtors’ business. On February 7, 2022, the Company filed a complaint= with respect to WB’s release of The Matrix Resurrections day-and-date on HBO Max and WB’s dispute regarding the Company’s right to co-finance derivative works based on the Film Library assets coowned with WB predominantly with regard to the Derivative Rights Agreements (the “Complaint”). Through the Complaint, the Company accused WB of shutting it out of its legal and contractual rights to co-own and co-finance the sequels, prequels, spinoffs, and other derivative works of the 89 films that the Company funded and co-owns and with respect to which derivative rights are applicable.”
Village Roadshow has produced and released over 100 films since launch in 1997.
Prior to the WB Arbitration (as defined below) that commenced in 2022, the Company enjoyed a lucrative and well-known co-production and co-financing relationship with Warner Bros. Entertainment Inc. and its affiliates (“WB”) that culminated in numerous and continual successful endeavors. The Company’s most valuable assets are a direct result of this success: the Film Library and the Derivative Rights (each as defined below). 8. Two primary issues led to the decline in the Company’s financial position: (1) the WB Arbitration, which has thwarted the Company’s most profitable business line; and (2) the failed and costly endeavor into the creation and production of independent films and scripted and unscripted television series (the “Studio Business”), which was never profitable.
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