TORONTO — Canadian animation house Lacewood Prods. will be declared bankrupt unless it has paid off its C$2.4 million ($1.7 million) in loans to Paragon Entertainment Corp. by July 23.
The Ontario Court (General Division) in Bankruptcy made the ruling Monday in a legal dispute over the terms of an agreement under which Toronto-based Paragon was to raise its interest to 75% of the entire Lacewood group of companies from 50% of a joint venture.
Lacewood’s troubles began last month, when Paragon called its loan instead of closing the deal. Earlier, Paragon had sent in a receiver, with Lacewood’s approval, to monitor the company’s reorganization.