After filing for Chapter 11 bankruptcy protection last week, New York-based Unapix Entertainment plans to get back to basics. According to Unapix treasurer Daniel Murphy, ‘Under Chapter 11, we continue business as we had, we continue our normal operations, but we have to develop a plan of re-organization to determine how we’re going to exit bankruptcy.’
The reality of that is pink slips for more staff. Unapix had already announced (in September) the discontinuance of its music business, Seattle-based Miramar Recordings, including catalog operations and the Jazz Store. Now, Murphy admits, even more employees will be cut from the Unapix payroll to accommodate the financial shortfall. The production and distribution of film and television projects make up the remaining operations.
Unapix will have little chance to mourn. While Chapter 11 puts a freeze on the liabilities incurred by the company up to the date of filing (November 28), the re-organization plan must be submitted to the courts within 120 days. Unapix has retained the services of an investment banker to look into the option of a sale, merger or new financing.
Murphy says that Unapix may be permitted to float its stock on the American Stock Exchange prior to submitting its plan to the courts, though that decision rests with the ASE. Trading was halted on November 21.
Tim Smith, Unapix’s former head of production, notes that Unapix would do well to look to the international market to find production dollars. ‘You can’t just do it out of the U.S., you really need a second or third element to make these projects work.’ Smith left Unapix in July 1999 and is currently vice president of Newsweek Productions.