Hollywood Producer Behind "Joker" and "The Matrix" Seeks Asset Sale Following Financial Distress
Village Roadshow Entertainment Group USA Inc. and its affiliated entities filed for Chapter 11 bankruptcy protection on Monday in the United States Bankruptcy Court for the District of Delaware (Case No. 25-10475), implementing a strategic restructuring plan centered around an expedited sale process for its valuable film assets.
The Hollywood production company, which has produced and released over 100 films since its inception in 1997, entered bankruptcy with a $365 million stalking horse bid from CP Ventura LLC for its library assets, according to court documents filed on March 17, 2025.
Financial Structure and Mounting Debt
In a comprehensive declaration supporting the filing, Keith Maib, the company's Chief Restructuring Officer since January 3, 2025, detailed Village Roadshow's complex debt obligations:
- Approximately $223.8 million in asset-backed secured notes under an ABS Facility dated November 10, 2020
- Roughly $163.1 million in senior secured notes pursuant to a Fifth Amended and Restated Note Purchase Agreement dated January 21, 2025
- A recently secured Bridge Facility of approximately $5.8 million obtained in January 2025 to address immediate liquidity needs
To fund the bankruptcy process, the company has negotiated a debtor-in-possession financing package of up to $12.8 million from certain senior secured noteholders, including a roll-up of the Bridge Facility and $7 million in new money.
Core Assets and Business Operations
The company's most valuable holdings include:
- The "Library Assets" consisting of its undivided interest in 108 feature films, including worldwide blockbusters like "Joker," "The Great Gatsby," the "Ocean's" series, "Sully," "The LEGO Movie," and "The Matrix" trilogy
- "Derivative Rights" related to potential sequels, prequels, and spinoffs
- A recently developed "Studio Business" focused on independent content production
The Library Assets alone generate approximately $50 million in annual revenue, according to court filings.
Catalysts for Financial Distress
Maib identified two primary factors driving the company's financial decline:
- An ongoing arbitration dispute with Warner Bros. Entertainment that commenced in February 2022 regarding the release of "The Matrix Resurrections" and derivative rights issues. This dispute has:
- Cost the company over $18 million in unpaid legal fees
- Effectively terminated what was previously the company's most lucrative business relationship
- Eliminated potential income from derivative rights exploitation
- The unsuccessful venture into independent film and television production from 2018-2020, which:
- Required approximately $47.5 million in development expenses
- Failed to generate profitable returns despite producing six feature films, five unscripted television series, and two scripted television series
- Led to a deteriorating industry reputation, including placement on the Writers' Guild strike list due to unpaid contracts
"Even if the WB Arbitration is resolved, the Company believes that it has irreparably decimated the working relationship between WB and the Company, which has been the most lucrative nexus for the Company's historic success in the entertainment industry," Maib stated in the filing.
Restructuring Efforts and Sale Process
Prior to filing, Village Roadshow undertook significant cost-cutting measures, including:
- Reducing its workforce from approximately 45 employees in early 2024 to just two executives and three administrative professionals in the U.S. and six financial professionals in Australia
- Vacating its longstanding Los Angeles office for a smaller, less expensive space
- Engaging Accordion Partners as restructuring advisor in February 2024, followed by Sheppard Mullin Richter & Hampton LLP as legal counsel in December 2024 and Solic Capital Advisors as investment banker in February 2025
The company pursued out-of-court sale options through Goldman Sachs Group, Inc. before determining that a Section 363 sale through Chapter 11 would maximize value, particularly given certain anti-assignment provisions in agreements related to the Library Assets.
Path Forward
The bankruptcy filing seeks to facilitate "one or more orderly sales of the Debtors' assets pursuant to Section 363 of the Bankruptcy Code in order to maximize the value of the estate for the benefit of all creditors and other stakeholders," according to the declaration.
Village Roadshow is pursuing a dual-track approach that could result in:
- The sale of Library Assets to the Stalking Horse Bidder for $365 million, subject to higher or better offers
- Potential alternative transactions, including an all-asset sale or separate sales of business segments
The stalking horse agreement was executed on March 14, 2025, following "extensive good-faith negotiations" with potential purchasers.
Professional Representation
The company has retained Sheppard Mullin Richter & Hampton LLP as legal counsel, alongside Accordion Partners as restructuring advisor and Solic Capital Advisors as investment banker.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 22 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.
Declaration of Keith Maib in Support of First Day Relief (22 pages)