TORONTO — Paragon Entertainment Corp. took control of the Lacewood Group Tuesday after the Ottawa-based animation house failed to meet Monday night’s deadline to pay off its debts.
Sheldon Wiseman, who founded Lacewood 12 years ago, couldn’t come up with the C$2.5 million ($1.8 million) needed to repay Paragon, in accordance with an Ontario court ruling handed down about two months ago.
In his effort to find backing, Wiseman, Lacewood’s president, had secured a financial commitment from Canadian-born actor Leslie Nielsen. But Wiseman said Nielsen’s lawyers couldn’t firm up undertakings they required from Paragon before the deadline.
Toronto-based Paragon and Lacewood formed a joint venture, Lacewood Animation Prods. Inc. in 1995. Last year, Paragon agreed to raise its stake in the joint venture to 75% from 50% and inject $2.5 million into Lacewood.
But the deal didn’t close at the end of March as scheduled and Lacewood sued Paragon for breach of contract.
The court ruled then that Lacewood would be free of Paragon if it repaid its debt. Paragon is Lacewood’s only significant creditor.
Tuesday’s court order, in Paragon’s view, gives it control of the Lacewood Group and most of its assets, including the program library, the animation studio facilities and projects in production and in development.
Paragon says its international sales agent, Accolade Releasing, will continue to handle distribution of Lacewood productions and will proceed with two Lacewood animated shows in production: “Legends of the Land” for CBC and “Teddy Bears Adventures” for Baton Broadcasting of Toronto.