BREAKING NEWS: Arc Productions Files for Bankruptcy (updated)

By Mike Valiquette

This is one of those tough ones. Toronto’s Arc Productions is closed. We were sent a photo just now of a notice taped up to the front door, courtesy of


UPDATE (August 5, 2016): The Globe and Mail has the most comprehensive coverage so far of the facts leading up to Arc’s closure. It’s behind a paywall, but Mark Mayerson has summed up fairly well on his blog. Mark’s been sharing his very balanced assessment of the situation here and here. I’d encourage you all to go have a read.

Original post:

Employees are receiving emails notifying them of the situation as we speak, and were informed on Friday of a “pay glitch” that prevented them from being paid per the usual schedule.

This is really tough, and will affect a lot of people. We’ll share info as we get it.

UPDATES: Joe Raasch is doing an amazing job of sharing job posts and opportunities:

Other news outlets are picking up the story, but there’s no real new info.

Arc Productions declares bankruptcy

BREAKING: Arc Productions Declares Bankruptcy, Locks Out Hundreds of Employees

Animation studio, awarded $23M in provincial funding, declares bankruptcy

Thankfully, there’s a lot of work to be had right now, and many of those let go will be fielding offers as we speak. But 500 or so employees is a lot for the Toronto market to handle, and Arc paid well. Matching those salaries will be difficult.

People are sharing job posts online, and this is another example of how a community comes together to help each other out.

There’s the question of wages, and the note in the photograph provides a couple of email addresses that people can use to pursue that at Deloitte Restructuring Inc, the interim receiver.

Warren Leung:

Jay Tailor:

Paul Casey:

More news as we have it.


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24 Responses to “BREAKING NEWS: Arc Productions Files for Bankruptcy (updated)”

  1. J

    Oh my god. They expanded so fast, and friends of mine were even getting given a month of free housing to move to Toronto to work there. This is a horrible turn of events.
    That’s a sudden influx of 400 more VFX/animation people into the workforce, which will probably reverse the upward trend wages have been on recently. I’m sorry to everyone involved and everyone in this industry in general for having things like this happen.

  2. Emmanuel Hamilton

    Ya it sucks, arc employee

  3. N

    We need some open discussion about what is happening in Toronto Anim/FX industry.
    This is not just a happened…

  4. R

    This is insane. One of the biggest studios in Toronto for both animation and vfx completely broken, this is bad for Toronto in general. The awful thing is they were actively looking as of last week for new employees and gave no word to staff about any situation arising.

  5. Matthew Everhart

    Will they continue making Thomas and friends?

  6. David Fortier

    This is a shame. They grew way too fast, but it still sucks for them, the employees, their clients and the industry. So sad to hear.

  7. Debarshi Das

    I cannot believe this is happening. I hope thomas and friends continue. :'(

  8. Daniel

    It’s good this article presents this neutrally since all the facts are not available yet, but this news does demand speculation and utter shock from others. I imagine if you were an employee and didn’t already know (if you hadn’t spotted the email) and you turned up to see this on the door that would be so devastating. It basically says, “Sorry, you no longer have a job and we may be unable to pay you what we owe you…” It’s difficult to believe management didn’t identify to their employees they were in trouble earlier, but there is, at the least, a LinkedIn post dated July 20 seeking to hire new employees. If it’s true, someone was playing with the lives of hundreds of people who depended on the studio. That’s breathtaking.

    Presumably an audit would have identified financial difficulties much earlier than this and management somehow was able to prevent that from being disclosed to stakeholders?

    I know this is only one company but I think many people would find it challenging to argue against the notion that dodginess prevails in the animation industry. There seems to be a shocking lack of standards; one’s which other industries are subjected to seem to not exist in the animation industry. How this could suddenly happen and hundreds of people no longer have jobs is head scratching stuff. Unfortunately, it also seems to be the case that those that speak up when they notice dodginess are likely to end up blacklisted and find it increasingly difficult to get employed. If this is one of the consequences of rolling over or just accepting things as they are then something’s got to change.

  9. DPC

    Be interesting to see the accounts to expose what the partners have sucked out of the business and dividends they have paid themselves especially after the Canadian Government backed it with millions of tax payers money !

  10. JDM

    Gobsmacked! This is such bad news for Toronto animation scene – nevermind 500 animation people without jobs or apparently a paycheque. Maybe some critical contracts fell through…? There is no way a company that size takes on significant expansion, moves to an amazing new offices, hires like mad – without the contract to back it up. Something went wrong…
    It would be worse to find out it was simply poor management…

  11. C.A.

    This is exactly what happened with C.O.R.E. A “glitch” on payday and then notice that they had an hour to clear out of the building.

    Yes, they grew too fast, but the Ontario government should have stepped up and provided assistance to keep things going until they could resolve their issues with the banks. The government has been providing incentives to companies to open studios in the GTA; you would think that they could work with them to keep the studio open.

    Now a large employer is closed, hundreds are unemployed and another animation house has bit the dust. The glut of animators on the market doesn’t bode well for gaining new employment and the salaries, that have been suppressed for a long time, will be kept lower due to the high supply of qualified people on the market.

    Sad for all our friends at ARC.

    • Herehere

      Government incentives should be based on longevity of a studio, and its productions, not simply setting up shop.
      @ C.A. – you hit it on the nail, squarely and accurately.

      No point being a one hit wonder for the economy. In economics, and finance, frequently the biggest and best became that way by being able to stick around the longest, leveraging opportunities, minimizing risk, and ‘keeping on swimming’.

  12. Dan

    You could see this coming a mile away, the entire studio has been in nothing but a state of crisis over the past 2 years.

  13. Frank

    Dear everyone who knows nothing about running a business. Firstly, you never tell your staff that you are having financial difficulties. If you do, many of your star employees will jump ship and that is the exact opposite of what you need when working to get things back on track. There is a reason this never happens anywhere else…like ever. Secondly, instilling panic and fear into your work culture is not healthy, even if that means you’re trying to “do the right thing” and be honest about your situation. It’s got nothing to do with values or morals. It’s business pure and simple. The company exists to turn a profit – not to fulfill people’s lives. Arc clearly was not planning to go under and obviously was hoping to have their lender provide more room for cash flow to afford expansion and new hires. I believe had that had happened that they would have pulled through in the end…but cash is king and you need it to run your business. Arm chair CEOs need to understand that this is reality in business. I can’t imagine management is happy about giving up their jobs either…it’s never the plan to fail. Lastly, this is a highly unfortunate situation and it is completely understandable that people are upset and disappointed to say the least. Not everything in business is predictable…if it was, everyone playing the stock market would be billionaires.

    • Daniel

      But, that’s bad business and taking too many unreasonable risks. It is unethical to operate a large business like that as it’s essentially gambling with the livelihood of hundreds of people. It’s true that most large businesses exist to make their shareholders profit, but they would not exist without their employees. So, they also serve the purpose of helping their employees profit and by extension, fulfill their lives, as you said. For the sake of argument, individually playing the stock market is merely risking your own monetary assets, though I don’t think you were drawing a comparison. Anyway, it’s uncertain what happened in this particular case.

  14. Aronav

    I would bet part of the reason behind this is because the Ontario Digital Media Tax Credit takes upwards of 3 years to process. Companies can normally finance against this credits, however since they take so long to process lending companies are starting to shy away from this tax credit.

  15. ER

    Unfortunately this is/was a trend in Montreal Anim/VFX studios as well, which has tarnished the MTL industry’s rep. Studios build up steam, overreach, undercut competition, taking on contracts at a loss (hoping to magically win over clients for return business which will hopefully be profitable, and build up their portfolio). That kind of magical thinking never works because the clients have NO loyalty. There’s a sucker born every minute, and there’s always another studio ready to underbid you, until THEY go out of business too. Montreal, Toronto,… I’m sorry to say that’s the anim/vfx industry world-wide. Some companies are so good at it, they go out of business and magically reincarnate under another name within a month, buying back their own equipment (which they haven’t finished paying for) at ridiculously discounted prices. If there’s any money in Anim/VFX, it’s in flipping companies via bankruptcies. I feel sorry for all those affected. It’s not just the bankrupted company’s employees, but also the employees from the other studios from market being flooded. As in MTL, the contracts will stop coming to Toronto because clients will be scared their work will end up in another bankrupt studio quagmire.

    • Herehere

      Wasn’t this Mtl VFX trend pretty much propagated by Hollywood VFX practices? You can win an Oscar for Life of PI then close your doors the next day due to the way the business model has to be run.
      Boom, build, reach, underbid, suck it up and deliver fantastic results, rinse, lather and repeat. It’s kinda like debt financing all the time (i.e. always behind the 8 ball) but without the ability to simply say – I’m behind in my bills, let’s print more money! (ie what countries and nations do to resolve their deficits).
      I think it’s unhealthy, unsustainable, and, excuse the rant, somewhat predatory ‘market’ economics. It’s like the studios are desperate for revenue (aren’t they, given the model above) and need to swim swim swim faster and faster to stay afloat. Even Michael Phelps can have a heart attack by going faster than his body can afford. So definitely a complex ‘organism’ like a studio can/will do the same. ;(

  16. Arc Ex-er

    Any Arc recently made ex-employee who has not received an email from Deloitte yet in regards to their stuff so email them at:

    As for unpaid wages Deloitte has made it clear they will not be paid.

    • Arc Ex-er

      Made typo, should email them at:

    • Another ex-Arc employee

      Not so fast. As I understand it, we are considered creditors and it is in Deloitte’s interest to encourage only the Wage Earner’s Protection program as a route to recover lost wages. That being said, wages are subordinate to moneys owed to suppliers, and much of the equipment was leased. It would be wise to pursue both avenues, but moreover, you can call the ESIC at 416-326-7160 to get some info on what you are entitled to.


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