In my initial post on the sudden bankruptcy filing of Axium Payroll Services, I commented on the potentially huge effect it would have on independent films currently in production and using Axium for their payroll. Typically, a small film will have posted some kind of payroll bond or advance that payroll monies are being drawn down against. Now, news is coming in from the production community about all of this.
I received this email from NYC production accountant Joe Lombardi, currently working on a production affected by Axium's shutdown, which I am reprinting with his permission:
I have to say it was chaotic yesterday, everyone calling all day, wanting to know what's going on. It was funny how many different rumors start flying around. The two things that anger me the most about all of this [relate to] the small shows that have deposits over there. A good friend of mine finished a small show and had a deposit that the editing and looping was to be drawn down from. Now he has lost that deposit. You know how tough it will be for them to find a way to get more money and finish this show now. Another show I am with not only loses it's deposit, but now they may have checks from last week's payroll bounce and they will have to redo the checks from another venue. Because they have already paid Axium's invoice they cannot recoup that money and the new checks being done will be paying that cost a second time. Not only will the deposit be a contingency hit, but all of the cost of these checks being re-done will be as well. Cast & Crew & Entertainment Partners I heard have been great. I called Cast & Crew Monday night when I found out, and they called me first thing in the morning. Scott Perry went over all of the ways we could transition to C&C, they really made it easy and we should be able to get payroll checks this week. I have heard from other payroll people that EP has been getting the same requests and have been accomodating as well.
Among the various outlets reporting on Axium today is the New York Post, which headlines their story
"Payroll Company is Casualty of Writers Strike." I was asked about this last night. I don't think the WGA strike can be labelled the prime reason, although, if the company was overextended, the production slowdown currently being caused by the strike would have been a contributing factor. (In the body of its story, the Post clarifies this a bit, quoting a source "close to the company" who said that the WGA strike was "the tipping point."
The Post also has this detail, which corresponds with what I have heard as well:
Axium, which is based in Los Angeles but has offices in New York, London, Toronto and Vancouver, BC, closed shop after lenders refused to extend its credit line, sources said.
The company's biggest secured lender, Golden Tree Asset Management, a $14 billion New York hedge fund, made the decision to pull the plug, sources said, adding that Golden Tree is the first in line to be repaid when Axium sells its assets.
The Los Angeles Times has also reported on the story and quotes the email sent by Axium to its employees blaming a "liquidity crisis" for the firm's closure.
The Daily Beery Blog has a post up entitled
"What to Do if Your Payroll Company Suddenly Closes." The post points out the particularly disastrous tax season timing of Axium's closure. As it is shut down, Axium presumably will not be able to send out W2s to the employees of all the productions it has handled this year. Furthermore, given the circumstances, cast and crew employed by Axium in 2007 may want to make sure that their withholding taxes were properly filed by Axium to the IRS. The site links to
EFTPS Online, the Electronic Federal Tax Payment System, which allows workers to do this.
Other comments on the Axium story submitted by readers of this blog can be found in the comments section of
yesterday's original blog post.
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posted by Scott Macaulay @ 1/09/2008 10:19:00 AM
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