Technicolor SA — the parent company that worked on two high-profile Sonic the Hedgehog projects — recently filed for Chapter 15 bankruptcy in the United States. Revenue losses caused by COVID-19 was to blame.
“Compounding matters, the COVID-19 pandemic has caused theatrical releases to be put on hold and production timelines to be pushed back, significantly depressing Technicolor’s revenue from production services,” said the French company in a statement obtained by Bloomberg.
Techincolor SA is the parent company of Moving Picture Company, one of the animation firms that collaborated with SEGA’s Marza Animation Planet and executive producer Tim Miller’s Blur Studio. The three firms, alongside with smaller animation houses like Trixter, designed the visual effects seen in the Sonic movie.
Moving Picture Company was caught in hot water amid allegations of crunch inside the now-defunct Vancouver studio. Technicolor cited economic pressures as the motive behind the wintertime shutdown. The Sonic movie was reportedly the last film produced by the Vancouver studio.
In addition, Technicolor Animation Productions, then known as OuiDo! Productions, collaborated with SEGA of America and were one of the key production companies behind the Sonic Boom television series.
The impact of the Covid-19 crisis on the business activities of the Group, and the uncertainty in global market conditions, have rendered it difficult to launch the initially contemplated rights issue within the contemplated timeline, and have increased the liquidity needs of the Group, which were originally intended to be covered by the rights issue.Technicolor SA
As part of the proceedings, Technicolor announced they have secured a new financial plan to provide a long-term framework of sustainability. Gross debt is planned to decrease from €1,444 million to €1,102 million.
Unlike Chapter 7 and 11, the Chapter 15 bankruptcy filing will allow Technicolor to restructure in their home country of France while protecting their assets in the United States and elsewhere.