Village Roadshow Entertainment Group, the renowned film production company behind iconic franchises like “The Matrix” and “Ocean’s,” filed for bankruptcy protection in the US on Monday, citing a prolonged legal battle with Warner Bros. Discovery Inc, Bloomberg reports.
The company, based in both the US and Australia, sought Chapter 11 protection in Delaware, listing $223.8 million in asset-backed secured notes and $163.1 million of senior secured debt, according to court documents.
While the company struggled to recover from the pandemic-induced slump in the film industry and the 2023 Hollywood writers’ strike, which caused delays in film productions, its primary financial woes stem from an ongoing arbitration dispute with its long-standing partner, Warner Bros.
In 2022, Village Roadshow Entertainment initiated arbitration proceedings over the release of “The Matrix Resurrections,” the latest installment in the popular movie series, on the HBO Max streaming platform. Village Roadshow argued that the simultaneous streaming release deprived the company of significant theater revenue. The company also accused Warner Bros. of “shutting it out of its rights to co-own and co-finance” future films within franchises that Village Roadshow had originally developed.
Village Roadshow Entertainment stated that the potential for a substantial arbitration award against Warner Bros. “could flatten the company’s balance sheet.” Moreover, the company acknowledged that even if the lawsuit is ultimately resolved, its key relationship with Warner Bros. has been “irreparably decimated.”
Founded in 1997, Village Roadshow Entertainment has produced and released over 100 films, including critically acclaimed and commercially successful titles such as “Joker,” “The Great Gatsby,” and “The LEGO Movie.” Since 2017, the company has been owned by Falcon Strategic Partners and Vine Media Opportunities. In January, Village Roadshow Entertainment appointed Keith Maib, a senior managing director at Accordion Partners, as its chief restructuring officer.
To facilitate the sale of its assets through bankruptcy, the company has secured an agreement with existing creditors for a debtor-in-possession financing facility. CP Ventura LLC is the so-called stalking horse bidder for its library assets.
The bankruptcy case is filed as Village Roadshow Entertainment Group USA Inc., 25-10475, in the US Bankruptcy Court for the District of Delaware.
