Axium, Widely-Used Hollywood Payroll Company, Shuts Doors*
Jan 8th, 2008 by John Stodder
*Updates added at bottom.
Could be the writers’ strike, could be the IRS, could be something else, but Axium International, a firm that handles payroll and other financial matters for major-studio and independent film productions, abruptly shut its doors today and told its employees to go home.
The Hollywood Reporter quotes sources as saying company president Ruben Rodriguez was no longer with the firm.
Axium, in business for 16 years, also provided gap financing for film productions. According to its website, units called Axium Global and Axium Global Workforce were providing payroll, benefit, workers’ comp and other services of this nature to businesses outside the entertainment world.
The impact could extend beyond the firm itself. Not to be redundant, but Axium’s number one job was cutting checks on behalf of clients with employees and vendors. Clients like, for example, Warner Brothers. It’s reasonable to speculate that some folks expecting to get a check this week or next might not, given that the firm’s closure was so sudden.
A few entertainment industry bloggers have picked up on the story, including the redoubtable Perez Hilton, who posted this email from a tipster:
I’m not sure if you heard about this yet, but as of 6pm last night, Axium (one of the few MAJOR payroll companies for the entertainment industry) told it’s employees to gather their personal things, stop what they were working on and leave the building. They have shut their doors. Axium has branches all over the world: New York, Louisiana, London etc… If you call any of those offices today you will only get a message saying that their offices are closed. This is going to have a HUGE impact on the industry. MANY MANY tv shows, feature films, reality shows etc… use Axium to pay their employees AND actors. Anyone working on a show that gets their payroll from Axium can no longer count on their paychecks showing up. To top this all off, NO ONE (not Variety, Hollywood Reporter etc…) is reporting on this. The major players around town DO know about it (I know one major company in town is VERY aware of what is going on but is NOT volunteering the information to their employees since they’re afraid they’ll stop working) but have no further information. This is going to have a MAJOR impact on the industry.”
(Hilton’s tipster has the office locations wrong. The Axium website places their offices in Los Angeles, Burbank, Hollywood, New York, Las Vegas, Toronto, Vancouver and London.)
The Hollywood Reporter didn’t have a lot more details, and didn’t confirm blogger reports of bankruptcy:
Speculation was running rampant Tuesday as to the cause of the sudden shuttering, though one source said the Internal Revenue Service was involved. The IRS did not comment.
“Unless they were involved in other businesses that were tanking, this is very odd,” said an indie film insider.
Not just odd, but a potentially big mess for Axium’s clients and those clients’ accounts payable.
ADDED: Now another entertainment industry gossip blog, Defamer, has its first post up.
One of our sources told us that Axium “fired everyone without warning” earlier today and is holding onto over $100,000 in payroll money recently deposited from the (Directors Guild of America.)
Stay tuned.
ADDED, 1/9: Here’s the LA Times coverage. And here’s some speculation from Defamer, based on another anonymous tipster.
ADDED, 1/10: According to a court-appointed trustee, Axium is in bankruptcy court, seeking a buyer. Story from The Hollywood Reporter. The firm has 98 creditors, including 20th Century Fox, the stage hands’ union IATSE and the Writers’ Guild. The bankruptcy was triggered when the firm’s biggest lender “swept Axium’s bank accounts and seized $22 million, leaving Axium unable to honor any of its payroll obligations or even to operate itself,” according to the trustee.
A tipster to Defamer sends along an email written by someone doing business with Axium as the last days approached. Cutting to the chase:
The moral of the story is… if you have recently received a check from Axium/Avalon DO NOT CASH IT or it will be bounced and you will be charged a fee. If you have already cashed a check, call your bank and see if it has cleared. If it has not - it won’t, and the funds will be withdrawn from your account soon and they will charge you a fee. If you have recently submitted timecards to Axium/Avalon and your paymaster didn’t think to take the originals home with him when he left, they are most likely garbage. I think we can expect this situation to screw up our Unemployment and our 2007 tax filing since the last of the employees were leaving today. This sucks!
ADDED, 1/11: It’s apparent from coverage in the New York Post and Los Angeles Times that if a firm deposited money with Axium to meet payroll obligations, first in line to get that money will be Axium’s biggest creditor, GoldenTree Asset Management, and not the employees who worked for it.
Sphere: Related ContentThe sudden shutdown means hundreds, if not thousands, of people won’t get paid. In addition, production companies that deposited funds with Axium to cover their payrolls might lose their money.
Yesterday, dozens of shell-shocked employees in the New York office carted away their belongings. Some huddled together to cry, while others passed around a bottle of whiskey.
Jennifer Palma, a client services manager who had been with the company for 12 years, said she believes the company has $15 million in outstanding checks.
“Thousands of people’s checks are going to bounce and there will be no one to answer questions,” she said.
OUCH!!!!!!