Annapurna is facing Chapter 11 bankruptcy after burning through nearly all of the $350 million credit facility it secured in fall 2017, Deadline reports. The only way the fledgling indie production company and distributor would avoid a potential bankruptcy situation is if it gets bailed out by billionaire Larry Ellison, the father of Annapurna founder Megan Ellison. Larry is the seventh richest individual in the world with a fortune estimated at $70 billion.
According to Deadline’s report, Annapurna’s senior leaders are considering filing for bankruptcy and have made “extensive preparations” to do so in Delaware or California. The report states Chapter 11 bankruptcy will be necessary if Larry Ellison does not provide financial relief from the struggling company.
More from IndieWire
- 'Booksmart' Box Office Struggle Divides Industry Over Annapurna's Marketing and Release Strategy
- Annapurna Lost At Least $8 Million on 'Beale Street,' 'Vice' Was a $15 Million Bomb -- Report
A spokeswoman for Annapurna has issued the following statement to IndieWire: “The Ellison family is in negotiations to restructure their deals with the banks. They remain in full support of the company and are dedicated to Annapurna’s future.”
Annapurna got its start eight years ago as a production company and become beloved by critics and cinephiles for backing auteurs like Kathryn Bigelow (“Zero Dark Thirty”), Harmony Korine (“Spring Breakers”), Spike Jonze (“Her”), Paul Thomas Anderson (“The Master”), and David O. Russell (“American Hustle”). The company’s financial woes began in full after it decided to start its own distribution arm to release its productions, beginning with Kathryn Bigelow’s “Detroit.” Since then, nearly every Annapurna release has been a box office bomb for the studio. Variety reported in March that only one movie has turned a profit for Annapurna since it launched a distribution arm: Boots Riley’s “Sorry to Bother You.”
The past year has been especially challenging for Annapurna. The studio released three movies on Christmas day, Barry Jenkins’ “If Beale Street Could Talk,” Karyn Kusama’s “Destroyer,” and Adam McKay’s “Vice,” and all of them reportedly lost money at the box office. Insiders told Variety that “Vice” was at least a $15 million bomb for Annapurna. Some sources said the loss was closer to $20 million. “Beale Street,” meanwhile, lost between $8-10 million for the company, while “Destroyer” was a $7 million misfire. These losses are nothing compared to Jacques Audiard’s “The Sisters Brothers,” which Annapurna opened last September to just $1 million at the box office despite its $38 million budget.
Annapurna’s financial troubles continued into this year with “Booksmart,” Olivia Wilde’s critically acclaimed coming-of-age story that the company opened nationwide over Memorial Day Weekend. “Booksmart” has since made $22 million, not terrible for an indie but hardly a major success for a film with a rumored production budget in the teens. Annapurna still has Richard Linklater’s “Where’d You Go, Bernadette” set for release August 16
According to Variety, Megan Ellison sent the following memo to staffers assuring them their jobs were safe despite bankruptcy rumors:
Dear AP Team,
I got word this morning that there are some rumblings around town about our current status with the banks and that a story is likely to hit the press at some point today.
Restructuring deals with financial institutions is not uncommon, yet the process is usually handled without a spotlight on it. Fortunately/unfortunately, people like to write about me and my family.
That said, it is of tremendous importance to me that you all know we are as committed as ever to this company and are in full support of our future.
Regardless of whatever comes out in the press, the truth is that we are well on our continued path towards success. There will always be speculation, misinformation and personal jabs in the press – that’s part of the business.
But know, none of that matters to me. What does is your sense of security and protecting the special community and culture at Annapurna. I believe in what we make and have no intention of stopping any time soon.
We have a lot of exciting things on the horizon and I have no doubt all of our hard work will continue to show Annapurna’s unique and powerful place in this industry.
If you have any questions or want to talk, please do not hesitate to reach out.