Village Roadshow Entertainment Group filed for Chapter 11 bankruptcy protection in a Delaware court yesterday, with US$223.8 million in asset-backed secured notes and US$163.1 million in senior secured debt, according to both Variety and Bloomberg.

The US-based company has cited the damaging effects of a dispute with longtime partner Warner Bros. that has racked up legal fees in the range of US$18 million. This falling-out dates back a few years to when VREG sued WB over the theatrical/streaming release of 2021 sci-fi action flick The Matrix Resurrections—which VREG alleges shrunk box-office returns while benefiting WB’s Max streamer. 

Before their relationship soured, VREG and WB collaborated on kids movie franchises such as Happy Feet and Cats & Dogs together, along with family-friendly films including The Lego Movie (2014) and Wonka (2023, pictured).

VREG has been navigating other troubled waters in the lead-up to this bankruptcy filing, with outstanding payments owed to union writers last year and CEO Steve Mosko stepping down in January.

The company has valued its assets at US$100 million to US$500 million, and its liabilities at US$500 million to US$1 billion—and at the moment, CP Ventura is attached as a “stalking horse” bidder to acquire the company’s library assets for US$365 million, according to THR.

It’s also worth noting that this bankruptcy has no impact on Australia’s Village Roadshow Group, which remains a separate entity with no control over VREG and holds less than a 3% stake in the US studio. “Village Roadshow Group is not impacted by VREG’s financial issues. Further, Village Roadshow Group’s nearly 50-year relationship with Warner Bros. remains as strong as ever and is not impacted,” the Aussie company clarified in a statement today.