Global Road management on Tuesday told staff that the studio’s lenders would be taking over the film company.
Last week it was reported that the Donald Tang-run studio was struggling and was strapped for cash.
In February, Tang tapped investment banks Moelis & Co. and Morgan Stanley to raise roughly $200 million in capital, but they failed to secure investors for the studio, according to a person familiar with the situation.
It’s unclear at this time whether there will be layoffs associated with the bank take over, or what will happen with the studio. The lenders could potentially feed more capital into the studio, sell off chucks or assets, or even file for Chapter 11 bankruptcy.
The fact that third parties could not generate the interest of investors is illuminating, but how has the mini-studio operated under such dire financial conditions for the six months since relaunch?
The person told TheWrap that talk about the company’s debt concerns ramped up in June.
You can thank Johnny Depp, in part, the insider said. Well-documented image problems for the actor have plagued much of his official Hollywood business, complicating releases at Warner Bros. and Disney in addition to his lawsuit-stricken Global Road project “City of Lies.”
That detective story about the murders of Tupac Shakur and The Notorious B.I.G. was shelved a month before its planned release on September 7 in wake of a lawsuit saying Depp assaulted a crew member (he says the incident was self-defense). The scuffle served as cloud cover as Global Road struggled with financial issues, said the individual.
The company’s TV and international sales division are currently stable. And the studio still plans to release its family adventure film “A.X.L.” on Friday in approximately 1,695 locations.
Global Road declined to comment for this story.
At an informal event to announce the company’s rebranding at February’s Berlin International Film Festival, studio head Rob Friedman told investors and industry types that the company anticipated spending $1 billion on production over the next three years.
ScreenDaily first reported the news.