The studio was known as Starz Animation until 2011, and under that banner had animated Gnomeo & Juliet, 9, and The Pirates Who Don’t Do Anything: A Veggietales Movie. Throughout the years, the company has been awarded tens of millions of dollars in Canadian taxpayer dollars to operate.

On its website, which has now been taken down, Arc touted how its “clients enjoy the benefit of Canadian tax credits, production subsidies and grants.” But despite all the free money that the company received from the Canadian government, it still couldn’t manage to operate within its means.

It’s unclear what went wrong at Arc, but we do know that the studio was aggressively expanding its workforce earlier this year, and even unveiled a new logo in April:

The first sign that something was wrong was last Friday when employees were told they weren’t being paid because of a “glitch.” Now, according to CEO Tom Murray, the company has no money to pay its artists anymore.

“We are still working diligently to find a solution that will allow us to pay outstanding wages due to you,” Murray wrote, “but, in the event that wages are not paid and the Receiver is appointed, there is a federal government program known as the Wager Earner Protection Program where employees of companies that have gone into receivership may be able to make a claim for unpaid wages, severance and vacation pay.” That program only pays up to $3,900 per individual.

Here is the full text of the letter that Murray sent to employees that explains how the lenders intend to take control of the company’s assets this Thursday, August 4:

IF you were an Arc employee, or have any other details to share privately, please contact us.

The news of Arc’s bankruptcy was first reported by TorontoVFXJobs.com.

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