Aniket Pujari(Bloomberg) — The film production house behind The Matrix and Ocean’s sagas filed for bankruptcy in the US amid a long-drawn legal battle with Warner Bros Discovery Inc.
Village Roadshow Entertainment Group sought bankruptcy protection in Delaware on Monday with $223.8 million in asset-backed secured notes and $163.1 million of senior secured debt, according to court documents.
The company, based in both the US and Australia, had struggled to bounce back from the pandemic slump and the 2023 Hollywood writers’ strike, which delayed film productions. Its liquidity problems, however, stemmed largely from an ongoing arbitration with long-standing partner Warner.
In 2022, Village Roadshow Entertainment filed an arbitration over the release of The Matrix Resurrections, the latest chapter of the movie series, on the HBO Max streaming platform, allegedly depriving the company of theater revenues. The company also accused Warner of “shutting it out of its rights to co-own and co-finance” new chapters of the films that it had first developed, it said in the filing.
The threat of a potential arbitration award “could flatten the company’s balance sheet” and even if the lawsuit is resolved, its key relationship with Warner has been “irreparably decimated,” Village Roadshow Entertaiment said.
The company was founded in 1997 and has produced and released over 100 films, including Joker, The Great Gatsby and The LEGO Movie. Owned by Falcon Strategic Partners and Vine Media Opportunities since 2017, Village Roadshow Entertainment appointed Keith Maib, a senior managing director at Accordion Partners, as chief restructuring officer in January.
The company has an agreement existing creditors for a debtor-in-possession facility to facilitate the sale of its assets through bankruptcy. CP Ventura LLC is a so-called stalking horse bidder for its library assets.
The case is Village Roadshow Entertainment Group USA Inc., 25-10475, US Bankruptcy Court for the District of Delaware.
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