Christal Films Distribution has secured court protection from creditors, coming one year after it was unable to strike a compromise with its partners Maple Pictures and Lionsgate.

The move, revealed on Friday, comes as rival Alliance Films nears a deal to release movie titles in Canada for Relativity Media, a main source of equity slate financing for the major studios.

Justice Robert Mongeon of Quebec Superior Court granted the order, indicating CFD has 30 days to benefit from the protection of the Companies’ Creditors Arrangement. The company was formed in 2000 by Christal’s Christian Larouche, Maple Films and Lionsgate.

Over the next month, company president Larouche has an opportunity to draw up and file a plan to settle his distribution arm’s affairs with creditors and shareholders.

Raymond Chabot Inc. is the court-appointed trustee for Christal, which is best known for releasing Quebec box-office hits including the Les Boys franchise and Les 3 p’tits cochons.

In May 2007, Maple and Lionsgate shifted the releasing of their titles in Quebec from their partnership with Larouche to rival Seville Entertainment. As CFD lost its product flow, so too went much of its bank financing.

Layoffs at the Montreal-based distributor followed, as Christal continued to lose key titles on its slate, including Martin Gero’s Young People Fucking and Wong Kar-Wai’s My Blueberry Nights.

Executives at Christal could not be reached for comment. But in a statement, Bertrand Langlois, VP of finance, blamed the move into bankruptcy protection on outside turbulence impacting on the Canadian distribution sector, not internal corporate changes.

‘Domestic and international markets are affected by the many changes within the film industry. Due to these circumstances, profit margins are becoming more limited,’ Langlois said, as he added his company ‘has taken all the necessary measures in order to find and propose solutions to all stakeholders.’

CFD says its financial difficulties will have no direct impact on its production arm, Christal Films Production.

But the bankruptcy protection does raise a question over plans for CFD to release local product like Denis Villeneuve’s Incendies, a Canada/France coproduction between micro_scope and Tarantula France Sarl; Frédérik d’Amours’ Noemie, which is produced by CFP; and Sylvain Guy’s Leo Huff, a coproduction between G.P.A. Films, CFP and Productions Grana.

The distributor’s next release is Kim Nguyen’s Truffe in July.

Meanwhile, Alliance Films is close to inking a Canadian distribution deal with Relativity Media, as it pivots away from long-standing output deals with New Line Cinema and Miramax.

Sources for the Canadian distributor and Relativity indicate negotiations are still ongoing, with no final agreement having been reached in Cannes.

The talks are understood to be led by Alliance president Charles Layton and Relativity CEO Ryan Kavanaugh, who has brokered a host of slate deals between major hedge funds and the Hollywood studios.

Recent movies from Relativity include Atonement, I Now Pronounce You Chuck and Larry, American Gangster, 3:10 to Yuma and The Pursuit of Happyness.

Relativity has known its hits and misses at the box office, but has thrived on its slate deals, including Virtual Studios at Warner Bros. and the Gun Hill Road funds at Sony and Universal.

Upcoming Relativity releases include Jim Sheridan’s Brothers, which stars Jake Gyllenhaal, Natalie Portman and Tobey Maguire; Tom Schulman’s Morgan’s Summit, starring Bruce Willis and Julianne Moore; and Tom Clancy’s Without Remorse.