Toronto studio Arc Productions closes its doors

Pop Goes The News — The Canadian studio that created the animated film Gnomeo & Juliet and did visual effects for Dolphin Tale closed its doors over the holiday weekend.

Hundreds of employees of Toronto’s Arc Productions are being told via email not to show up for work Tuesday.

“We regret to inform you that Arc is experiencing significant financial difficulties and a liquidity crisis,” reads a message to staff from CEO Tom Murray.

On Friday, a court appointed Deloitte Restructuring Inc. as interim receiver. On Aug. 4, Deloitte is expected to be ordered to take possession of the company.

Arc has not yet filed for bankruptcy. Deloitte can decide to operate the company until it can find a buyer.

The doors to the company’s Richmond Street East offices have been secured and the Arc Productions website has been taken offline.

According to its Facebook profile, more than 500 employees worked at Arc’s 50,000-square-foot studio. With clients like Disney, DreamWorks Animation, Nickelodeon, Netflix, LEGO and Mattel, it was one of Canada’s largest animation studios.

“In addition to our world-renowned animation services, our clients enjoy the benefit of Canadian tax credits, production subsidies and grants,” the profile reads.

Arc is best known for animating the Thomas & Friends series since 2013. It was working on Blazing Samurai, an animated comedy set for release next summer and starring the voices of Michael Cera, Samuel L. Jackson, and Ricky Gervais.

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Formerly known as Starz Animation, the studio completed animation for Gnomeo & Juliet, produced by Elton John’s Rocket Pictures.

In 2009, Starz Animation received a $23 million grant from the Ontario Ministry of Economic Development and Trade.

Two years later, Starz Inc. sold majority interest in the company to a group of Canadian investors headed by Murray and Steven B. Hecht, who rebranded it Arc Productions.

Only three months ago, the company unveiled a new logo and advertised several job openings.

Workers said they were told Friday that they were not going to receive their scheduled pay because of a “glitch.”

In his message, Murray insisted the company “is working diligently to find a solution that will allow us to pay outstanding wages due to you.”

But, he also provided a link to the federal Wage Earner Protection Program.

“I want you to know how proud I have been to work with all of you and how much I have appreciated your commitment to our clients and loyalty to the company.

“I am so sorry that, in spite of all of the efforts, I have been unable to resolve this crisis and apologize for that failure.”