Felix & Paul's Court File Shows 76 Buyers Approached, No Binding Bids and a $350,000 Sale to Former Executives

Deloitte Restructuring's first report to the Quebec Superior Court on Felix & Paul Studios, dated September 14, puts the Montreal studio's liabilities at $34.459 million as of July 31 and the price obtained for its best-known work at $350,000. The studio made an assignment in bankruptcy on September 10. One week later a court registrar approved the sale of the Space Explorers franchise and a lunar camera system to a numbered company formed by former executives and employees, and by September 28 the trustee reported that the money was in its trust account. Amounts taken from the trustee's reports are in US dollars, as the reports themselves specify.

Insolvency Insider reported the bankruptcy on September 20. The documents behind that report are posted on Deloitte's case page, and they carry considerably more than the headline number, including how the sale process ran and who is left holding the debt. They are in French; quotations from them here are VR.org's translations. On this site on August 29, Evan Marcus declined to call the company dead on the strength of LinkedIn posts from laid-off staff. The court file now supplies the date. Nearly all of roughly 46 employees were dismissed on August 17, the trustee writes, and two remained on the payroll when the bankruptcy was filed.

Seventy-six parties approached, no binding offer

The sale process predates the bankruptcy by two months. An information memorandum dated June 29 offered "all or a portion of the shares or assets," and the trustee's report says the solicitation formally began on July 14 with a binding-offer deadline of July 28. Solicitation documents went to 76 prospective buyers and investors. Fifty-one signed confidentiality agreements and received the confidential summary. None submitted a binding offer by the deadline. The single non-binding offer proposed no cash payment to creditors, only the deferral of what the trustee calls a marginal portion of the secured debt, and its author withdrew on August 9, citing the liquidity that restarting the business would require.

Two documents filed on September 14 do not agree on every count. The trustee's signed report records 11 interviews with prospective buyers, approximately 46 employees and net losses of $19.2 million across the three most recent periods. The motion its lawyers filed the same day gives 72 interviews, about 75 employees, $20.3 million of losses and total liabilities of roughly $33.3 million. This article uses the report's figures. The trustee repeated the headcount and the liabilities total in its September 28 preliminary report to creditors.

On those figures the business lost roughly two dollars for every dollar it took in. Revenue was $2.336 million in 2024, $3.144 million in 2025 and $3.164 million in the first seven months of 2026, against net losses of $5.488 million, $7.655 million and $6.075 million. Seven months of 2026 brought in more than all of 2025, with Interstellar Arc open at AREA15 in Las Vegas for the whole stretch. It was not enough. The debtor attributes its insolvency, against a backdrop of the pandemic and of geopolitical and tariff tensions, to cumulative losses in the production studio, slower growth than forecast in Interstellar Arc's revenue, delays to two lunar missions, and the cancellation of a major project in June 2026 that limited its ability to raise financing. The filings do not identify that project. On the sworn statement of affairs, where a bankrupt company ticks the reasons for its difficulties, one box is marked: lack of financing or capital.

What $350,000 bought

The motion describes two sets of assets. The first is a 3D, 360-degree camera system built to operate on the lunar surface and developed, the motion says, with the support and participation of the Canadian Space Agency and Meta. It consists of engineering designs, firmware, source code, electronics, technical documentation and the accumulated know-how of the team. The agency's interest is on the public record: in August 2021 it announced a C$482,607 contribution under its Lunar Exploration Accelerator Program toward the studio's camera technology for spacewalks and the lunar surface. The second is the Space Explorers intellectual property, whose value the motion ties to location-based distribution through Infinity Experiences, at-home distribution agreements with Meta, dome and planetarium distribution through Hubblo, and new lunar content that Meta is currently financing. The franchise's Quest app, Space Explorers Ultimate Edition, was still listed as a free title on the Meta Horizon Store on October 2.

Deloitte asked to sell before the first meeting of creditors, citing sections 18, 19 and 34 of the Bankruptcy and Insolvency Act, and the motion's case for urgency is the most specific passage in the file. The cameras are being integrated for two lunar missions, one with Astrobotic scheduled to lift off in November 2026 and one with Intuitive Machines in December. Five engineers designed the system, and by the filing date they had been out of work for three weeks. An Astrobotic simulation had been pushed to September 17, the day of the hearing, and rebuilding the computing environment needed to take part would require at least three days of the team's work. The flights are meant to raise the technology from readiness level 6 to level 7. The Canadian Space Agency wants its contract moved to the buyer, and Meta has confirmed it favors transferring its agreement. That value is not automatically contained in the intellectual property itself, the motion argues, because the counterparties will only move their contracts to a structure that can still deliver on the existing schedules.

The buyer is 18201714 Canada Inc., which the motion describes as newly formed by former executives and employees. Corporations Canada's public record dates the company to August 28, eleven days after the layoffs and thirteen before the bankruptcy. The record lists one director and, as last confirmed on that date, one individual with significant control holding more than 75 percent of the shares. Both entries name Stéphane Rituit, the studio's president and chief executive, who signed the statement of affairs on September 10. The trustee's report states that the buyer is not a "related person" within the meaning of subsection 65.13(6) of the Act, while noting that some of its shareholders are considered related to the debtor. The registry entry predates the sale and shareholdings can change, so it should be read as the position on August 28 and no later. The secured creditors did not oppose the transaction, and the September 17 order records that nobody contested the motion.

Deloitte's justification rests on the market test more than on the price. Its report calls $350,000 "clearly superior" to what a forced liquidation would yield, and says the proceeds will cover the professional fees tied to the transaction and repay a marginal part of the secured debt. Set against $34.459 million of liabilities, the sale price comes to about one percent.

Who is owed

The balance sheet explains the gap. Of $22.055 million in book assets at July 31, $17.216 million sat in three lines that the trustee values at or near nothing in a liquidation: $11.587 million of intangible assets, mostly the studio's productions; $5.058 million of leasehold improvements; and $571,000 of virtual production equipment. An appraiser put the equipment's liquidation value at almost nil because of its "extremely limited" usefulness to other buyers. The trustee tried and failed to get anyone to appraise the productions at all, and notes that the revenue they generated has been marginal in recent years.

Most of the debt is public money. The notice to creditors attaches the statement of affairs and a creditor list totaling 32.6 million dollars. That is a narrower count than the trustee's, and it appears to be in Canadian dollars, since its entries match the trustee's US-dollar figures at roughly 1.39 to one. On that list, five federal and Quebec government lenders account for C$26.6 million, or 82 percent of the claims: Export Development Canada at C$8.72 million, Investissement Québec at C$8.05 million, BDC Capital at C$4.01 million, Canada Economic Development at C$3.86 million and SODEC, the province's cultural enterprise agency, at C$2.0 million. National Bank of Canada is listed for C$4.29 million and employees for C$1.08 million.

What those lenders recover is close to nothing. The trustee's first report counted $22.2 million of secured claims. The September 28 report counts $19.4 million, with Canada Economic Development's $2.772 million moved to the unsecured column. On either number, Deloitte writes that secured claims far exceed the value of the estate and that ordinary creditors will receive no distribution. The first meeting of creditors, held by videoconference on September 28, lasted 24 minutes. Its minutes record a single question, from the studio's Montreal landlord, about when the premises would be handed back.

The attraction named in the filing is on sale again

Interstellar Arc is the only title the filings name among the causes of the insolvency, and it is not among the assets the motion describes as sold. Its status has changed since the bankruptcy. On September 8, AREA15 chief executive Winston Fisher told the Las Vegas Review-Journal, "What I'd say is, it's done. There are discussions to see if there's ways to reopen it." On October 2, AREA15's own ticketing page listed departures for every remaining day of the month at $49 to $59, with 37 time slots open for October 3, and the attraction's website now sends buyers to that page. The filings do not say who is operating the show, on what terms, or who owns it. Neither AREA15 nor any Las Vegas landlord appears on the creditor list.

For a venue operator, a distributor or a lender weighing an immersive content deal, the file is a specific warning about collateral. Seventy-six parties were offered the business, 51 of them saw the confidential summary, and none made a binding bid for a studio whose productions were carried on the books at $11.6 million. The one sale that closed was built around a five-person engineering team and the two lunar missions it was preparing for, with the Space Explorers rights attached, and it went for $350,000 on the argument that the team would disperse within weeks. A licensing agreement should therefore say what happens to the content, and to the people who maintain it, if the licensor stops paying its staff. The open item is the lunar schedule. The motion gives Astrobotic's liftoff as November and Intuitive Machines' as December, and the flight record those missions are supposed to establish is now the buyer's to earn.