(Updated, 5:35 p.m. EST)
The Montreal-based visual effects company Newbreed, which is working on the Daniel Radcliffe horror film "Horns," hasn't paid its workers in weeks and is financially struggling, a half-dozen current and former employees have told TheWrap.
Some workers report that when they have been paid, their checks have bounced.
Newbreed has worked on a number of high-profile films and games such as "Transformers: Dark of the Moon" and "Halo: Reach" While the company is working on "Horns," it has struggled to find enough work to alleviate cash flow problems, insiders told TheWrap.
Newbreed employed roughly 70 staffers and freelancers at its peak. One employee told TheWrap that the number of people remaining is rapidly diminishing, with under 30 still remaining.
"We used to get paid with checks, but after a third one bounced for me I could not longer accept them," another employee said. "We are always told it's the banks fault and that [the company is] powerless to correct the situation."
Employees say they are owed anywhere from one to three paychecks plus overtime. Visual-effects artists who left the company earlier have not been paid for work that took place three to four months ago, one employee said.
All of the employees spoke to TheWrap on the condition of anonymity because they were worried that they would not be paid as a penalty for speaking out publicly.
"There's been a lot of mismanagement, and new business has dried up," an individual with knowledge of the company told TheWrap.
Newbreed President Josee Lalumiere admitted in an email to TheWrap that there had been issues with payroll, but refuted claims that work had dried up, saying that the company had seen growth of 200 percent in recent months.
"We did have some issues with our payroll over the past weeks, caused by a turn of events related to delays in our financing and other circumstances unfortunately beyond our power," Lalumiere said. "Right now, I can assure you that we are focused on resolving these issues ASAP."
The visual-effects industry is a notoriously low-margin one, so any canceled or delayed project can send a company into free-fall. It has also been impacted by studios' search for tax incentives and subsidies, which has often led them to choose a visual-effects house based largely on the rebate they will get for sending work to a particular country or state.
Canada, where Newbreed is based, does offer subsidies for post-production work, so location should be something of a competitive advantage for the company.
In recent years, roughly a dozen visual-effects companies, including Oscar-winning studios like Digital Domain and Rhythm & Hues, have yielded to financial pressure and filed for bankruptcy or folded.
Initial reports that employees were not being paid surfaced this week on Facebook and on the industry blog VFX Soldier.