EXCLUSIVE: Sources tell us that Alchemy, the distribution company formerly known as Millennium Entertainment, will be filing for Chapter 7 bankruptcy by the end of the week.
Some estimate Alchemy’s debt to banks and vendors at $70 million-$90 million. Allegedly, Alchemy has been using money it has received from its corporate clients to cover payroll over debts to other clients as cash flow has reduced to a trickle, a source close to Deadline says.
Alchemy was an enormous buyer out of the 2015 Cannes Film Festival, acquiring titles such as the Colin Farrell film The Lobster and Nanni Morretti’s Mia Madre. The company was financially healthy when it was known as Millennium Entertainment, however financial straits ensued during the Bill Lee era at Alchemy. Alchemy acquired content distribution outfit AnConnect and Anderson Digital a year ago, saw the departure Lee at the end of 2015, with Alchemy’s Scott Guthrie and Kelly Summers being promoted to co-presidents in an effort to correct the company’s course. Previously Guthrie was COO, while Summers was SVP of strategy and financial planning.
We heard that after slashing its work staff by 40%-50% earlier this year, another 40 employees were cut recently with Summers departing the company. This currently leaves Guthrie at the helm with a staff of 20-25 employees.
After Alchemy acquired AnConnect and Anderson, it went from a theatrical distribution label that acquired and released movies to a company that had to service output deals of 50 clients including Bagdasarian Productions, owner of the Alvin And The Chipmunks franchise; DreamWorks Animation’s nontheatrical and classics divisions; Vertical; Well Go USA; and XLrator among others.
Following its financial straits in February, Alchemy began unloading notable theatrical acquisitions it made out of Cannes, Toronto and other festivals. The Brie Larson thriller Free Fire and The Lobster were rescued by A24, with the latter becoming a notable summer art house title with $7.5M at the domestic B.O. Music Box took hold of Mia Madre which is scheduled to open August 19. IFC Midnight acquired Lucile Hadzihalilovic’s atmospheric Evolution back in March.
While no bankruptcy documents have been filed, Alchemy certainly seems to be unable to pay its bills – at least according to a lawsuit filed by Excel Entertainment last week. The federal complaint by the faith-based DVD and Blu-ray movie company out of Utah is seeking $838,074.45 from Alchemy subsidiary AnConnect for breach of contract and lack of any payment since September 2015.
“Alchemy has not paid Excel Entertainment the full amounts owing for those entertainment goods, and it would be unconscionable for Alchemy to enjoy the benefit of those entertainment goods that have not been returned to Excel Entertainment without paying for them,” the 11-page filing of June 24 asserts (read it here). The filing also alleges that AnConnect/Alchemy, both of who are named as defendants, have not responded to a May 2 correspondence requesting payment of an outstanding balance of $385, 497.25.
Deadline’s Dominic Patten contributed to this report