The Yari Film Group’s distribution division has been forced into involuntary bankruptcy, according to the company’s CEO, Bob Yari.
The Hollywood Reporter says four creditors took action against the company, forcing the Los Angeles division of United States Bankruptcy Court to order Yari’s releasing arm into Chapter 11, forcing it to reorganize. The company is disputing the debts.
Yari blamed the tightening credit markets and the earlier bankruptcy of payroll company Axium, which according to Yari swept millions of dollars from its payroll accounts, as a “perfect storm” that sunk the company financially.
Yari said the company was left with no other option but to commence substantial layoffs and to suspend its releasing activities. There was no immediate indication of how deep the layoffs would be.
While the distribution of films such as What Doesn’t Kill You and Rod Lurie’s Nothing But the Truth are moving forward (both are making awards qualifying runs this month), the immediate impact on these and other films are unclear.
He also said the company’s production arm will not be affected, though it is likely to make fewer movies.
Yari said the company is still moving forward on the production of Joe Carnahan’s Killing Pablo and The Governess starring Jennifer Lopez.