‘Ottawa’ Toronto Animation Studio Arc Productions Abruptly Shuts Down, ‘Unable to Pay’ Employee Wages
TORONTO — A Toronto animation studio that received millions of Ontario government dollars to generate jobs over the past decade abruptly shut its doors Tuesday, potentially leaving more than 500 employees out of work.
Arc Productions told employees to stay away from work in a letter posted on the locked doors of its downtown Toronto office. CEO Tom Murray wrote in the notice that Arc “is experiencing significant financial difficulties and a liquidity crisis,” leaving the studio unable to pay outstanding wages.
“Despite the very best efforts of management to find a solution to this financial emergency, we have not been able to resolve this matter,” Murray wrote.
Arc’s primary lender appeared in court last Friday to request that Deloitte Restructuring Inc. assume interim oversight of the company, Murray said in the letter. The lender plans to return to court Thursday to make that request permanent, he added, by asking for Deloitte to take full control of the business.
Murray advised employees that Arc’s studio would be bolted as of Tuesday, at which point, he said, they could contact Deloitte for further information.
“Employees should not come to work unless they are asked to by Deloitte and wait to hear from Deloitte about picking up your personal belongings,” Murray wrote.
Murray declined to comment Tuesday. A spokesperson for Deloitte, meanwhile, said it plans to update its website with “all publicly available information” as the situation proceeds.
For now, Arc’s hundreds of Toronto employees have temporarily been left in the lurch. The website Cartoon Brew reported Tuesday that workers weren’t paid as scheduled last Friday due to an unspecified “glitch.”
Employees should not come to work unless they are asked to by Deloitte
Arc — which is currently known for producing Thomas and Friends, a children’s TV series — pulled its website offline sometime before Tuesday, greeting users with a notice in bold: “Access forbidden!” The website once noted how Arc’s clients “enjoy the benefit of Canadian tax credits, production subsidies and grants,” according to Cartoon Brew.
That was likely a reference, in part, to the $23 million job grant the Ontario government awarded to Starz Animation in 2009.
The province plucked the money from its “Next Generation of Jobs Fund,” with the intention of creating and protecting around 250 jobs at the studio. Arc employed 220 people at the time.
“Starz Animation Toronto is on course to become a world centre of excellence that produces exceptional quality animation work,” Robert B. Clasen, Starz’s then-CEO, said in a release on May 26, 2009, the day of the announcement.
Arc advertised new jobs at the studio as recently as April 12, posting openings for “Technical Directors, Story Artists, & Lighters!” on Facebook. The link to the application page can no longer be accessed.
“On a personal level, 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,” Murray wrote in his letter. “I am so sorry that, in spite of all the efforts, I have been unable to resolve this crisis and apologize for that failure.”