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Village Roadshow Entertainment Group, the production company behind blockbuster franchises including The Matrix, Joker, and Ocean's, has filed for Chapter 11 bankruptcy protection in Delaware. The company's financial collapse comes amid mounting debts estimated between $500 million and $1 billion according to court documents.
Chief Restructuring Officer Keith Maib cited two primary factors behind the company's downfall in court filings. "The WB arbitration has caused the company to incur more than $18 million in legal fees, nearly all of which remain unpaid," Maib stated, referring to the ongoing legal battle with former partner Warner Bros.
This legal dispute erupted in early 2022 following the release of The Matrix Resurrections. Village Roadshow alleged Warner Bros had simultaneously released the film on HBO Max streaming platform while in theaters, significantly impacting box office performance. The production company further claimed it was being shut out of rights to sequels and prequels of jointly produced films.
"The company believes that it has irreparably decimated the working relationship between WB and the company, which has been the most lucrative nexus for the company's historic success in the entertainment industry," Village Roadshow stated in its filing.
The second factor contributing to Village Roadshow's bankruptcy was an ill-fated venture into independent film and television production launched in 2018. Court documents describe this as a "failed and costly endeavour" that delivered no profits.
Industry-wide challenges further exacerbated the company's difficulties. Like many studios, Village Roadshow struggled with decreased demand during the pandemic and disruptions from the Hollywood writers' and actors' strikes that began in May 2023.
In December, the Writers Guild of America banned its members from working with Village Roadshow, citing the company's alleged failure to pay contributors.
To mitigate financial troubles, Village Roadshow has proposed selling its extensive film library for $365 million (£281 million). However, this would cover only a portion of the company's substantial debt obligations.
The dispute with Warner Bros mirrors similar tensions between studios and production companies over streaming strategies. Scarlett Johansson's lawsuit against Disney regarding Black Widow's simultaneous streaming release represents another high-profile example of this industry-wide conflict.
A hearing in the Warner Bros arbitration case is scheduled for April 25, though it remains uncertain whether proceedings will continue given Village Roadshow's outstanding legal fees and bankruptcy filing.
