Pacific Metro, formerly known as Media Arts and the Thomas Kinkade Co., filed for Chapter 11 bankruptcy protection after facing millions of dollars in punitive damages awarded to gallery owners who successfully pressed fraud claims against the artist's company. But Thomas Kinkade, one of the world's wealthiest artists and his corporate representatives insist that the bankruptcy filing is only due to unnecessary lease agreements that are dragging the company down financially.
Satterfield said reorganization under bankruptcy laws was needed because outsourcing had left the company with a fraction of its former work force but still holding long-term leases.
"The company is in serious financial condition and is unable to continue without debt relief," the bankruptcy filing said.
The company owes 1,000 to 5,000 creditors a total of $10 million to $50 million, according to court documents.
A list of creditors more than 100 pages long was appended to the bankruptcy filing. It included a cardboard-box company in Sacramento, the state Board of Equalization and small art galleries in Folsom, Auburn and Elk Grove.
Using bankruptcy, Thomas Kinkade's companies hopes to end their leases and move into a much smaller space that can better satisfy its commercial needs. They have also insisted that they intend to make payment in full for all claims that are allowed in the bankruptcy case. However, what is more likely is that the company will negotiate some reduction in its existing debt while in Chapter 11 bankruptcy.
Thomas Kinkade's company bankruptcy follows and precedes several conflicts with the law. The famous painter was recently arrested for driving under the influence of alcohol only a couple of weeks after his company filed for Chapter 11 bankruptcy.