Huge Entertainment Payroll Company Bankrupt; Entire Industry Affected

As if the industry wasn’t hard hit enough from the writer’s strike, one of the largest Hollywood payroll companies just declared bankruptcy yesterday after shutting their offices on Monday and telling all their employees to pack up and leave. Axium handled payroll services for the Directors Guild of America and studios such as Warner Brothers. They had over $100,000 in assets from the Director’s Guild according to Defamer, and a commentor on Defamer says it’s likely they required a month’s worth of payroll ahead of time from production companies. That means that many entertainment workers could be stiffed out of their pay at a very difficult time. All of Axium’s assets have been frozen:

Axium Intl., the entertainment industry’s third-largest provider of payroll and accounting services, has closed unexpectedly and filed for Chapter 7 bankruptcy.

Axium shuttered operations Tuesday, a day after its lenders froze the company’s bank accounts. Immediate impact was unclear, but some of the frozen funds included paychecks for film projects.

Director Charlie Matthau told Daily Variety that much of the money he was owed on the recently completed indie drama “Baby O” was frozen Tuesday.

“I was supposed to go pick up a $75,000 check from the DGA, until they told me there was this problem, that Axium had gone out of business and all the accounts were frozen, ” said the helmer, son of the late Walter Matthau. “I feel totally violated, and I’m hoping that the Guild will be able to help me.”

Matthau said Axium notified him recently that the money had been wired into his account.

“In fact, they’d done no such thing, and they were hiding this 400-pound gorilla of bankruptcy,” he added. “Because of that memo, I hope that the City Attorney or District Attorney looks into this. It has affected me and likely a whole lot of other people.”

A Chapter 7 bankruptcy filing is designed to govern the liquidation of company assets. Axium reps were not available for comment Tuesday, and the headquarters offices on Wilshire Boulevard were shuttered.

Axium president Ruben Rodriguez had left the firm. Axium employees were told Monday not to come to work until further notice, and if in contact with their clients, to tell them that Axium could no longer process their business.

[From Variety.com]

Another commentor on Defamer notes that she hasn’t been paid by Axium at her entertainment-related job since December 14th. LAist says that there are a lot of unanswered questions in this case and that many people are worried where their next paycheck will come from, if Axium correctly gave their withholdings to the IRS, and how they will handle taxes this year. This affects all people with paychecks issued from Axium and Avalon.

It is thought that Axium went bankrupt due to greedy executives, similar to the Enron scandal. They have filed Chapter 7, not Chapter 11, which means that Axium employees won’t receive whatever pay was owed to them.

People are saying this is somehow due to the writer’s strike, but it sounds more to me like this company didn’t manage their assets and that someone was cooking the books. Axium’s website, which features a huge globe and a spinning glowing X, is still available, but their offices are shut and not taking calls.

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