LOS ANGELES: Broadcast PR and marketing firm On the Scene Productions (OTSP) filed for bankruptcy, according to court documents. PRWeek previously reported that the company let go all of its employees.
The voluntary Chapter 7 filing was made October 1 in the California bankruptcy court system. Under such a filing, the company goes out of business in order to liquidate and pay off its debts.
Members of the OTSP board did not respond to requests for comment. But according to an internal e-mail signed by the OTSP board of directors and obtained by PRWeek, the company blamed the failure of its bank, Irwin Union, which was taken over by FDIC in mid-September for the terminations. “The Company is now unable to access its deposit accounts, or otherwise to collect accounts needed to pay expenses, including payroll," Jeff Holland, an OTSP board member and MD at Seacoast Capital which invests in the firm, wrote to staff yesterday, September 30.
“In view of these extraordinary events, and because the Company has concluded that it will no longer have the ability to make payroll as it comes due, the Company has concluded that a layoff of all employees is required,” the e-mail continued. The e-mail asked that employees remove their personal belongings by 5pm EDT on Thursday, October 1.
Irwin Union Bank was closed by the Office of Thrift Supervision on September 18 and the Federal Deposit Insurance Corporation (FDIC) was named receiver. However, the FDIC negotiated a sale of the failed bank and its assets to another bank, First Financial Bank, and assured customers that all deposits were safe and they could continue to use check cards and checks, and repay loans.
Ben Garrett, an executive producer with OTSP, said no one was paid on September 30 and none of the employees will be eligible for COBRA insurance.
Still, Garrett told PRWeek that some employees planned to finish projects they had been working on.
“We're going to execute our projects,” he said. “It's not the customer's fault.”
Updated October 2, 2009, 2:25pm