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Toronto animation studio behind ‘Thomas the Tank Engine’ suddenly closes

Click to play video: 'Arc Productions files for bankruptcy'
Arc Productions files for bankruptcy
WATCH: Tue, Aug 2: A major player in Canada's animation sector, the producers of Thomas & Friends, notified hundreds of staff they will no longer be operating Tuesday. Peter Kim reports – Aug 2, 2016

The Toronto animation studio behind the hit kids show Thomas the Tank Engine has suddenly closed and locked out hundreds of employees, shuttering one of the country’s biggest cartoon producers.

A letter posted Tuesday on the door at Arc Productions’ downtown office states the studio “is experiencing significant financial difficulties and a liquidity crisis” that it has not been able to solve with its creditor. The lender is seeking to have Deloitte Restructuring Inc. take control of the the company’s finances.

Arc is one of Canada’s largest animation studios, with more than 500 employees, according to a cache of the company’s website, which has been taken down.

In addition to the Thomas shows, Arc was also in the midst of producing a forthcoming major animated movie, Blazing Samurai, and an upcoming Netflix series, as well as other projects.

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The posted letter, a photo of which circulated online, tells employees that the company is working to find a way to pay outstanding wages.

The letter, apparently written by CEO Tom Murray, adds that “I am so sorry that, in spite of all the efforts, I have been unable to resolve this crisis and apologize for that failure.”

Global News could not reach Arc or Murray for comment.

Employees said the closure was a shock.

“There were no warnings, everything was so great and exciting,” said Boris Andreev, who came back from vacation to find his art director job gone.

“This by far was one of the best work experiences because it was so friendly and family-like inside,” he said, adding he thinks Arc are about “three paycheques behind” with workers.

“I had no idea. This morning I was in the shower and my wife looking at Facebook and she found a post that Arc was closing,” said Rafael Franco, a production manager.

“I could not believe it. I thought she was just being funny, but it was true.”

Local animation expert Joe Raasch, who runs an industry job listing site, said Arc expanded rapidly in the last six months, hiring more people and moving into a modern multi-floor 50,000 square foot office.

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Raasch said an email was circulated Monday informing staff of the closure.

Toronto’s bustling animation and visual effects industry should be able to offer work for many Arc employees, with several other studios already extending postings, he added.

“I think a lot of them will be absorbed pretty quick into other studios,” he said. “Once you work at one studio you begin to know people at other studios. You move around.”

Raasch added that he doesn’t see the closure as signifying any woes for the local animation industry, saying that at this point it looks like an isolated case.

With files from Peter Kim

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