Following a weekend during which it tried to make 11th hour deals to save the company and its brands, Technicolor Group CEO Caroline Parot sent a memo to employees Monday, writing “due to inability to find new investors for the full Group, despite extensive efforts, [Paris-headquartered] Technicolor Group has filed for Court ‘recovery procedure’ before the French Court of Justice to give a chance to enable to find solutions.”
Technicolor encompasses VFX giant MPC (“Mufasa,” “The Lion King”), commercial VFX brand The Mill, Mikros Animation and Technicolor Games. A total shutdown of MPC and Technicolor’s operations would affect thousands of visual effects workers in countries include the U.S., UK, Canada and India. The turn in business has raised the alarm and sparked sadness within the VFX community.
Parot’s memo explains, “In each country, the appropriate framework for orderly protection and way forward is currently being put in place to allow, when possible, to remain in business continuity.”
Technicolor has already started to shut down U.S. operations. On Friday, it began alerting customers and employees, sending U.S. employees a WARN notice as required by law for large companies that anticipate closings and mass layoffs.
At least one recovery effort already started for roughly 100 U.S. employees of The Mill. The creative leadership and most of the creative staff that was Technicolor’s The Mill U.S. is joining forces with Dream Machine FX to launch a new venture, Arc Creative, Variety reported exclusively on Monday. A statement from the artists explains they they are working to launch the new entity amid “the complexities of Technicolor’s Chapter 7 proceedings.”
Questions remain about how studios will finish upcoming projects that are currently housed at MPC, which include Disney’s live-action remake of “Lilo and Stitch” and Paramount’s “Mission: Impossible — The Final Reckoning,” as well as Mikros’ work, such as Paramount and Nickelodeon’s upcoming “Teenage Mutant Ninja Turtles” sequel.
Technicolor has experienced several restructurings and management changes since filing for chapter 15 bankruptcy protection in 2020. The Technicolor memo states, “the Group has been experiencing difficulties linked to a variety of factors and has not been spared from external headwinds: the difficult operational situation resulting from post-COVID recovery, a costly and complex separation from the previous group followed by the writers’ strike leading to a slowdown in customer orders causing severe cash flow pressures.” Technicolor and MPC were contacted by Variety for comment.
Technicolor Post was sold to Streamland Media for $36.5 million in 2021, merging its operations with Streamland’s businesses, including Picture Shop. In 2022, Technicolor relaunched MPC and the other current brands as Technicolor Creative Services while the company’s connected home and supply chain services were separately brought under a new brand, Vantiva.
The text of Parot’s memo to employees follows.
Dear Team,
As we have communicated over the past months, the Group has been experiencing difficulties linked to a variety of factors and has not been spared from external headwinds: the difficult operational situation resulting from post-covid recovery, a costly and complex separation from the previous group followed by the writers’ strike leading to a slowdown in customer orders causing severe cash flow pressures.
Today, the company must face reality. Due to inability to find new investors for the full Group, despite extensive efforts, Technicolor Group has filed for Court “recovery procedure” before the French Court of Justice to give a chance to enable to find solutions.
In each country, the appropriate framework for orderly protection and way forward is currently being put in place to allow, when possible, to remain in business continuity.
This decision was not taken lightly; every possible path to preserve our legacy and secure the future of our teams will be thoroughly explored to offer a chance to each of its activity to be pursued with new investors.
Technicolor is more than just a company, it is a community of talented, passionate, and creative individuals who have brought some of the most iconic visual experiences to life. The work we create together demonstrates our dedication and artistry and defines Technicolor.
As we move forward, our priority is to support you through this transition. Given the complexities of labor laws and regulations across the different countries in which we operate, this process will be conducted on a country-by-country basis, ensuring compliance with local frameworks, and providing the necessary support for each of you.
We recognize that this is an incredibly difficult moment, and we are here to support you in any way we can.
In each of your countries, you will receive a dedicated email in relation to your situation in due time.
With deepest appreciation and respect,
Caroline Parot
