Global Road, having been seized by creditors a week ago, is now looking to lay off staff as it hopes to avoid bankruptcy.
A person familiar with the situation told TheWrap that the studio would be cutting jobs on Tuesday, but that the number of staff cuts is not yet known.
Global Road has 120 employees and roughly 50 in the domestic theatrical film production, distribution and marketing division that is expected to be directly impacted.
Layoffs come on the heels of another box office disappointment for the studio last weekend. Global Road’s “A.X.L.” opened to a paltry $2.9 million in its wide release.
Global Road declined to comment for this story.
The company, after failing to raise much-needed $200 million in capital from foreign and U.S. investors, has been in financial disarray.
Global Road’s film division was effectively taken over by its creditors on Aug. 21, after previously operating under the control of CEO Rob Friedman. As a means to recoup any losses and avoid filing for Chapter 11 bankruptcy, lenders are also looking to sell off some of the company’s unreleased films and potentially other assets.
TheWrap reported last week that the Bank of America and Dominic Ng’s East West Bank, which are the company’s top lenders, are hoping to set meetings and set up screenings with several top indie distributors to unload much of the existing slate of film projects.
“The Silence,” a horror film lead by “Mad Men” star Kiernan Shipka, the live action-animation hybrid “Playmobil” and the recently shelved Johnny Depp true-life detective story “City of Lies” are among the studio’s projects on the market.
An insider at one indie studio told TheWrap that while they weren’t shopping for any of Global Road’s unreleased films, they were looking into other assets, including Global Road’s library of content.
“This is essentially a fire sale now,” the insider said.
The person familiar with Global Road’s business has said that the company’s TV and international sales division are currently stable and separate from lender control. But other industry insiders suggest they could be impacted as the banks look to recoup losses.
It’s unclear whether selling off assets and cutting jobs will be enough to buoy the studio, which failed to secure investors to raise a projected goal of $200 million in capital the company announced in February. But failure to generate a cash infusion (or move the films in the first place) could force the company into Chapter 11 bankruptcy.