After 19 years in operation and producing 863 commercials, one of the longest surviving animation studios in Canada, Toronto’s Animation House, officially closed its doors on April 15 in the wake of poor market conditions and corporate management mishaps.

‘In its heyday it was the pre-eminent commercial production and animation house in Canada,’ says executive producer and general manager Michael Crabtree, who was with Animation House throughout its final years. ‘A lot of people in the animation industry at one point or another passed through the doors of Animation House.’

Animation House founder Bob Fortier says, like many production companies, the short-form animator had been struggling over the last year due to the falloff in commercial production.

‘In the last year it was tough economically in the industry,’ says Fortier, who quit the company last year but continued to work there on a freelance basis. ‘The board flow trickled down and budgets were reduced. [Animation House] was a victim of the economy as much as anything.’

But while poor market conditions were a factor, the beginning of the end can be traced back to 1998 when, in an effort to expand Animation House and grow into long-form, Fortier sold the company to Balmur Entertainment.

Animation House was merged with L.A.-based animation studio Evening Sky Productions, with the responsibility for managing the Toronto studio centered in L.A. A year ago, investment firm Covington Capital became the majority shareholder in Balmur, acquiring 74% of the company’s shares.

According to Shelagh Larkin, VP finance for Balmur, shareholders simply could no longer continue to invest in the company due to what she describes as ‘external factors.’

‘[The shareholders] basically made the decision that they weren’t going to fund anymore. The decision wasn’t made because of business performance,’ says Larkin.

Larkin says shareholders, who have made significant investments and will not see any money out of it, ‘were under a lot of pressure from their credit committee not to fund anymore.’

According to Larkin, vacation pay owed to employees totals $35,000 and the severance pay would run in the neighborhood of $400,000. ‘There is certainly not going to be severance,’ says Larkin. ‘Right now it is not the intention of the shareholders to ante up on the vacation and/or severance directly out of their pockets.’ She adds that there has been some discussion of ‘paying the vacation pay out of the proceeds of the current ‘wind down.”

Meanwhile, former executives and animators continue to finish work they began while still in Animation House’s employ.

Amid rumors that Animation House was teetering on the edge, Crabtree decided to accept a contract from longtime Animation House client Kellogg to do a Honey Nut Cheerios spot. ‘I certainly didn’t want to take it if they were going to pull the plug on this place,’ Crabtree explains. Investors assured Crabtree they were committed to making a go of it, but a couple of weeks after he went to the plate and got the job, investors announced they were closing the doors.

Larkin says the decision to accept the Kellogg job was ‘based on a commitment that the business would not be shut down within the time required to finish the job. At the time that we accepted that one job, we did believe that we would see it through to the end,’ she says.

Crabtree along with creative director Terry Godfrey, who was with Animation House from day one, negotiated with agency Cossette to complete the project out-of-house. Crabtree found space, bought the necessary equipment and brought as many of the Animation House team with him as he could to complete the commercial under Rolling C Productions, a production company Crabtree had started before joining Animation House.

‘It sort of helped ease the shock a little bit, it gave us focus for another month to really think about what we’re going to do in the future,’ says Godfrey.

Completing the Kellogg spot provides work until the end of May for some Animation House employees.

It remains unclear whether the studio set up to finish the Kellogg spot will translate into a new animation venture. Crabtree is nonetheless determined to stay in the business and has managed to line up an animated music video for Kid Koala to keep the computers busy for another three months while he looks for new projects.

Fortier says he’s already been talking with some interested parties about a new studio and hopes to start something up within the next couple of months and bringing as many of the Animation House family back together as he can. The new studio would again try to combine long form and commercial animation. ‘I still firmly believe that it can be done, it just didn’t get done right this time around.’