Cash-strapped Unitel Video unexpectedly shuttered its television and film post-production arm Friday. The move eliminated nearly 100 jobs just one day after the company filed for bankruptcy protection from creditors in an attempt to emerge from a string of losses and mounting debts.
New York-based Unitel, the latest casualty in the rapidly consolidating and cutthroat post-production industry, also said Walter Arader resigned from the company’s board of directors.
Unitel provides post work for films and operates five television studios in Manhattan, where the “Sally Jesse Raphael,” “Montel Williams,” “Inside Edition,” “American Journal” and other syndie shows are taped.
It was unclear Friday how production on those shows would be affected by the closing of its post-production arm.
Although specific numbers of layoffs were not disclosed, the number is thought to be close to 100. Unitel recently employed 232 people.
In its Chapter 11 petition filed in U.S. Bankruptcy Court in Delaware Thursday, the post house listed $56.7 million in assets and $52.4 million in debts, as of May 31.
Shares of Unitel were halted at $0.38 on Friday morning on the American Stock Exchange after reaching a 52-week high of $3.88 in June.
Three Unitel subsidiaries — R Squared, Unitel 53 and Unitel 57 –also filed for Chapter 11, along with the parent company.
Among the company’s 20 largest creditors are the Allegheny County Industrial Development Authority, owed $8.5 million in loans; GE Capital Business Asset Funding Corp., owed $3.3 million; and Charter Financial, owed $2.1 million for leased equipment.
Three years of losses
Unitel has been losing money since 1996. In an attempt to turn around its fortunes, the company in recent years has moved out of the commercial advertising business, turning its focus toward entertainment. So far there is little sign the change has worked.
It defaulted on its main line of credit in April. It’s also behind in payments on other debts, officials said.
To stay afloat, Unitel consolidated two New York units that do post work on movies and TV shows. In May the company closed its money-losing Editel subsidiary in Los Angeles, laying off 85 employees, after talks to sell to post giant Four Media Inc. fell through.
Talks to sell its Pittsburgh and Burbank-based mobile television production division — which generates 35% of its revenues — to National Mobile Television also fell apart in August.
“Post-production is a very difficult environment in today’s world, and it’s difficult to make money,” Unitel CEO Barry Knepper told Daily Variety earlier this year.
Sound post-production rival Todd-AO Inc. is selling a 57% stake in the company to cable programming giant Liberty Media Group.