Following a weekend dedicated to last-minute negotiations to safeguard the company and its associated brands, Caroline Parot, the CEO of Technicolor Group, addressed employees on Monday. In her message, she stated that despite extensive efforts to secure new investors for the entire group, the company has filed for a "recovery procedure" with the French Court of Justice. This step aims to enable the identification of viable solutions for the future of Technicolor.
Technicolor is home to prominent entities in the visual effects industry, including the renowned VFX studio MPC, which has worked on projects like “The Lion King” and “Mufasa,” the commercial VFX company The Mill, Mikros Animation, and Technicolor Games. The potential complete shutdown of MPC would have dire repercussions, impacting thousands of visual effects professionals across the United States, United Kingdom, Canada, and India. This development has understandably raised concerns and sorrow in the VFX community.
In her memo, Parot elaborated on ongoing measures being implemented in each country to ensure orderly protection and a pathway forward, with hopes of maintaining operations where possible.
The shutdown of U.S. operations has already commenced, with alerts sent to customers and employees. The company has complied with legal requirements by issuing a WARN notice to U.S.-based employees, which is mandatory for larger organizations facing mass layoffs.
Despite the adversity, a recovery initiative has kicked off for approximately 100 employees at The Mill. The creative leaders and many individuals from Technicolor’s U.S. operations at The Mill are collaborating with Dream Machine FX to establish a new entity named Arc Creative, as reported by Variety. They are striving to launch this new venture amidst the complexities arising from Technicolor’s Chapter 7 proceedings.
As projects currently assigned to MPC, such as Disney’s live-action “Lilo and Stitch” and Paramount’s “Mission: Impossible — The Final Reckoning,” hang in the balance, questions loom regarding their completion. Additionally, Mikros is involved in producing Paramount and Nickelodeon’s forthcoming “Teenage Mutant Ninja Turtles” sequel.
Technicolor has undergone numerous restructuring efforts and changes in leadership since filing for Chapter 15 bankruptcy protection in 2020. In her internal communication, Parot noted that the company has grappled with various challenges, including the post-COVID operational landscape, the complications arising from separating from the previous group, and the impact of the writers’ strike, all contributing to severe cash flow issues.
In 2021, Technicolor Post was sold to Streamland Media for $36.5 million, leading to a merger with Streamland’s existing businesses, including Picture Shop. In 2022, Technicolor rebranded MPC and its other current brands as Technicolor Creative Services, while the company’s connected home and supply chain services were rebranded as Vantiva.
The complete text of Parot’s memo to staff is as follows:
Dear Team,
As we have communicated in recent months, the Group has been facing various challenges and has not been immune to external pressures: the arduous recovery from COVID-19, a complicated separation from the previous group, and a writers’ strike that led to a decrease in customer orders, thereby affecting our cash flow significantly.
Today, we must confront reality. Despite our best efforts to find new investors for Technicolor Group, we are compelled to file for a Court “recovery procedure” with the French Court of Justice to explore possible solutions.
In every country, we are currently setting up the appropriate frameworks for protected and orderly operations to ensure continuity wherever feasible.
This decision was incredibly difficult, and we will explore every avenue to protect our legacy and secure a future for our teams, aiming to allow every activity a chance to continue with new investment.
Technicolor constitutes more than just a business; it represents a collective of gifted, passionate, and creative individuals who have contributed to some of the most memorable visual experiences. The art we create together reflects our commitment and talent, defining what Technicolor is all about.
As we navigate the transition ahead, we are dedicated to supporting you. Acknowledging the complexities of labor laws in the countries we operate, this process will follow local legal requirements, providing necessary assistance to each of you.
We understand that this is an exceedingly challenging time, and we are here to help.
In each of your regions, you will receive specific correspondence regarding your circumstances in due course.
With deepest appreciation and respect,
Caroline Parot
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