Bob Yari has placed the releasing division of his Yari Film Group into Chapter 11 reorganization.
The move to seek bankruptcy protection was compelled by a court order, according to a statement by the “Crash” producer. The legal procedure was prompted after Yari came out on the losing end of legal actions by four creditors. Employees learned the news Friday when Yari distributed an internal email apprising them of the situation.
In an acknowledgement of the reorganization, Yari cited a “perfect storm” of tightening credit markets and the Axium bankruptcy, which swept millions of dollars from its payroll accounts. As a result, Yari Film Group’s releasing division began what the company called “substantial layoffs” and the suspension of its releasing activities.
Staffers were shocked by the development.
“Our goal is to aggressively work toward reorganizing our debt so that we can become a stronger company,” Yari said. “In the meantime, our production arms are distinct entities with separate financing which remain unaffected by the legal proceedings. We will go on functioning, making new films, covering our payroll and paying for employee benefits.”
Yari Film Group said that it is moving forward with limited award qualification releases of “What Doesn’t Kill You,” which opened Friday in New York and L.A., and “Nothing But the Truth,” which will be put into qualifying release this week in the two cities.
Yari said he hopes to continue making progress toward starting production on two other projects: the Joe Carnahan-directed “Killing Pablo” and “The Governess.”