Credit woes force Yari into Chapter 11, layoffs
EmptyThe Yari Film Group's distribution division has been forced into involuntary bankruptcy, according to the company's CEO, Bob Yari.
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 tightening credit markets and the bankruptcy of payroll company Axium, which according to Yari swept millions of dollars from his company's payroll accounts, as a "perfect storm" that sank his company financially.
Yari said his company was left with no option but to commence substantial layoffs and suspend its releasing activities. There was no immediate indication of how deep the layoffs would be.
While the distribution of such films 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 effect on these and other films is unclear. The company also has distributed such recent films as "The Illusionist" and "Resurrecting the Champ."
Yari said the company's production arm will not be affected, though it is likely to make fewer movies.
"Our goal is to aggressively work toward reorganizing our debt so that we can become a stronger company," he said. "In the meantime, our production arms are distinct entities, with separate financing, which remain unaffected by the legal proceedings. We will go on functioning, making new films, covering our payroll and paying for employee benefits."
Yari added that the company, also behind such films as "Crash" and "The Matador," is moving forward on the production of Joe Carnahan's "Killing Pablo" and "The Governess," starring Jennifer Lopez. Both movies are set to go into production during the first quarter. (partialdiff)