April 29, 2009
Despite extensive government funding the well has been running low at Fatkat Animation Studios.
Business New Brunswick spokesman Ryan Donaghy confirmed yesterday Fatkat's financial situation has forced it to reduce its number of staff.
"It's my understanding that they've reduced staff levels to control costs and stuff. It is my understanding that at this point they are still in operation and have not vacated the building."
Despite initial reports the business had closed, Fatkat owner Gene Fowler said the animation studio hasn't shut down.
"We're still there."
The company has moved out of its location at the Legion hall in Newcastle and is switching locations because it can no longer afford to stay in the building, he said.
"It's just hard times at the moment. We're between projects and I can't afford to retain that type of facility."
A call to Fatkat's office went unanswered Tuesday and an automated recording gave no indication of any changes, but when asked when the decision was made to move to a new location Fowler said the company has not moved in yet.
"We're just in between. We can no longer afford that building."
Over the years Fatkat has received substantial amounts of money from the province through grants and loan guarantees.
During the Bernard Lord era, they received $83,000 in 2007 and an additional $77,000 from the Atlantic Canada Opportunities Agency.
Under the Shawn Graham Liberals, $125,000 went to Fatkat in 2006 for new equipment at its Newcastle office and another $370,000 to help expand staff in 2007.
On top of that, the Miramichi Regional Economic Development Fund gave Fatkat $410,130 for seven projects. In total the province gave over $1.06 million, plus a $500,000 loan guarantee from Business New Brunswick.
Business New Brunswick would work with the company and their bank in the event Fatkat is unable to repay money owed to lenders, Donaghy said.
"Certainly we'll be working with those proponents to identify the status of that guarantee and look at what portion of that guarantee might need to be accessed by the bank."
But the money hasn't always been coming in, with the Business Software Alliance levying a $36,000 fine against Fatkat for using unlicensed software.
Initially Business New Brunswick had reported Fatkat was closed, but Donaghy later confirmed the studio is still in business, but with a reduced staff.
"It's our understanding they are basically down to a skeleton staff, but they are still operating now. The specifics and detailed information would obviously have to come from the company."
Public Safety Minister John Foran said he had heard rumours about the company moving, but as of Tuesday morning he hadn't seen any official documentation.
He did say the company provided a lot of employment and brought a lot of new people to the region.
"Let's just hope they're going through a rough time and they're going to be able to survive it."
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