Tennessee movie fans may be astounded at how much money goes into creating the blockbuster movies they see in the theaters. It can cost tens - even hundreds - of millions of dollars to create a quality film. This may lead ordinary people to believe that Hollywood is chock-full of money, but some studios struggle financially. The latest case involves Soundelux, a leading provider of post-production sound. The studio recently filed for business bankruptcy.
Soundelux has a lot of history surrounding it. The company has provided sound services for thousands of TV shows and movies, including "The Hunger Games," "The Lone Ranger," "CSI" and "Family Guy." It has been around for over five decades and employed 170 people.
The bankruptcy filing was shocking news to Soundelux's employees. Thirty employees have been laid off and they had no clue it was coming. It is estimated that 100 employees may be laid off when it is all said and done. Two facilities - in Santa Monica and Hollywood - have been shut down. The Burbank studio is still open and is finishing up some shows in post-production.
Soundelux has lost revenue due to the decrease in feature films. The studio will honor its commitments during the Chapter 11 bankruptcy proceedings while restructuring and preparing the company for sale. It will continue to serve its customers and pay creditors.
Chapter 11 bankruptcy offers advantages to companies who don't want to give up and shut down right away. They are given time to come up solutions to reorganize and streamline processes so they can continue to stay in business. In fact, companies can continue to remain in business as long as they generate enough revenue to meet their financial obligations. For companies that file for it, Chapter 11 may be one way to concentrate on the revenue side of things without having to worry about creditors breathing down their neck.
Source: Deadline.com, "UPDATE: Soundelux Files For Chapter 11 Bankruptcy; Pink Slips For 30," David Robb, May 21, 2014