Jordan-Based RGH Entertainment Vows To Stay Open Amid L.A. Layoffs

EXCLUSIVE: Rubicon Group Holding, the crown jewel of Jordan’s nascent entertainment industry, is having short-term cash-flow problems. The Jordan-based children’s animation and themed entertainment company, with three offices in the San Fernando Valley, has been having trouble paying its bills and meeting its American payroll. Paychecks have been late – sometimes for weeks on end — and about 40 of its 100 Los Angeles-based employees were laid off last month, with at least one former employee filing complaint with the state labor commissioner.

Current employees were made good on their back pay last week, but those who were furloughed have only been given half the pay they had coming. RGH informed them Tuesday that they will receive the rest next week.

“We take care of our employees, because that’s how life should be,” Randa Ayoubi, the company’s co-founder and CEO, told Deadline on the phone from Jordan. “We had a temporary cash flow problem, but it’s just a point in time. In two months, this will not be an issue. We have a very healthy pipeline. We told our people what the situation is and how they will be compensated, and we delivered on our promises. … We are trying to do good in the U.S. and worldwide. We respect and value people. We’re a good company that has a good purpose.”

Postman PatRGH, which co-produced the Postman Pat animated movie with DreamWorks Animation subsidiary Classic Media and the Pink Panther And Pals animated series with MGM, has been a source of pride and jobs for many Jordanians since it was co-founded in 1994. In 2006, Jordan’s Queen Ranai hosted a gala dinner at the Metropolitan Museum of Modern Art in New York to celebrate the launch of Ben & Izzy, the company’s first animated TV, series about two little boys, one American and one Jordanian, who meet at an archeological dig in Jordan and are transported back in time. “This cartoon,” the queen said that night, “uses the language that modern children understand – a language that unites them, whatever their background or beliefs, and makes them realize that you do not have to be alike to get along. The best example of that is the Ben & Izzy production team itself.”

Jordan’s King Abdullah, though not an investor, has taken a personal interest in the company’s biggest project, a $1 billion theme park called the Red Sea Astrarium that was to be built in the coastal town of Aqaba. Announced in 2011 for a 2014 opening, RGH billed it as a park that would be “sure to become a family destination, attracting visitors from the 350 million residents across the Middle East and fun, leisure as well as thrill-seekers from all over the world.” The theme park was to feature high-tech rides in which visitors would sail above the Seven Wonders of the World.

But events in the Middle East — including the Arab Spring uprisings, civil war raging in neighboring Syria and the spread of ISIS — conspired against those plans, and many of RGH’s recent layoffs here were in its theme park division, where employees were designing the computer-generated images that were to have been key components of the rides. Tourism plummeted, and plans to build the family-friendly theme park have been postponed.

In January, L.A-based staffers who had company health benefits found out that their coverage had been cancelled a month earlier, leaving many of them with out-of-pocket medical expenses. Money was so tight in December that the electricity was shut off for three days at one of its three local offices and a generator had to be brought in to keep the lights on.

Paul McCartney Lady GagaAyoubi insisted that RGH is not going out of business, that it will pay all of its obligations and right will soon its financial ship. One of the biggest projects in the current pipeline, an animated feature film called High In The Clouds, is moving forward, she said. That film, based on a children’s book co-written by Paul McCartney, is co-produced by Unique Features. Earlier this month, the former Beatle performed a duet with Lady Gaga for the film’s sizzle reel, which the company hopes will be ready in time to show distributors at the Cannes Film Festival market in May.

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Had a beautiful session with Sir Paul McCartney and friends. Working on one of his many secret projects! Killer musicians, vibe, and lots of laughs.

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McCartney has been a frequent visitor to the RGH offices in Woodland Hills. “He recorded in our recording studio,” said a source. “He loves animation and is very engaged in the process. He reviews the art and character designs. He eats in our kitchen. He’s a vegan. He’s very talkative and very friendly. He talks to everybody.” His next visit, however, will be to a different office in the Valley. To cut costs, the one he visited so often has been closed and is up for lease.

“I think it’s a great company with a good vision,” said a former employee who says he’s still owed $16,000. “I think they’re very good people. They want to do right and they’ve created this really amazing company, but I think they bit off a little more than they could chew.” He says he received half of his back pay several weeks ago. “I didn’t ever expect to see that money. That was great,” he laughed.

Amjad Swais, director of RGH Entertainment’s North American operations, told Deadline that during a candid talk with his staff last month he explained the company’s difficulties and plans to ensure everyone gets paid. He also asked the workers to be patient, positive and loyal. Now all of the current employees have been made good on their back wages. He told Deadline all laid-off workers will be paid the remainder of their back pay, plus late payment penalties, “by the end of the first week of March.”

“We are not closing,” Swais told Deadline. “We are committed. Everyone we owe will be paid.”

Amid the turmoil in the Middle East, cartoons might not be the most pressing of the region’s needs. But it would be a much sadder place without them.

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