Gainax Co., Ltd., the renowned animation studio behind the legendary “Neon Genesis Evangelion,” announced on May 29th that it has filed for bankruptcy at the Tokyo District Court, and the petition has been accepted. This marks a significant moment in the history of the studio, which has been a pivotal player in the anime industry since its founding in 1984.
Since its inception, Gainax has been involved in the production and sale of animation and video games, achieving monumental success with hits such as “Neon Genesis Evangelion.” However, the studio’s fortunes began to decline around 2012 due to a series of poor business decisions.
These included ill-fated ventures into restaurant management, the establishment of an unplanned CG company, large unsecured loans to individual executives, and the failure to secure crucial investment contracts. These missteps led to severe financial distress, exacerbated by the privatization of the company by its management and executives.
The situation deteriorated further as Gainax faced expulsion from various committees for non-payment of royalties and became entangled in lawsuits over loans. The establishment of numerous affiliated companies bearing the Gainax name, led by the same executives and their associates, resulted in a mass exodus of staff and the loss of the studioβs core animation production capabilities. These new entities declared their disassociation from Gainax, leaving the original company to bear the brunt of the financial mismanagement.
In 2018, the companyβs representative director since 1992 transferred shares to an individual with no expertise in video production, with the endorsement of the then-management. This individual was arrested in 2019 for sexual assault on a minor shortly after assuming the role, leaving Gainax completely inoperative and burdened with enormous debt.
To address the chaos following this scandal, a new management team was installed in February 2020 with the support of creditor Color Inc. The new team undertook the daunting task of reviewing and understanding the situation through various documents left behind.
They uncovered significant financial malpractices, including large-scale borrowing from financial institutions, defaulting on debts to various animation industry companies, and unauthorized sales and transfers of intellectual property and production materials by former management and executives.
With the cooperation of Khara and the new management directors, efforts were made to confirm the rights of works, protect the rights of writers and creators, and properly manage and operate scattered intellectual property and materials.
The goal was to ensure the continued operation of major works through appropriate production committees. However, the presence of many former management members as shareholders and the substantial debt accumulated under their regime proved insurmountable obstacles.
In May of this year, Gainax faced a lawsuit from a debt collection company, prompting the decision that continuing business operations was unfeasible. Consequently, the company filed for bankruptcy.
Gainax expressed deep regret to its creditors, cooperating companies, and fans, lamenting the necessity of choosing bankruptcy due to the inability to fully achieve their goals. The company extended heartfelt gratitude to the directors of the new system, who worked without compensation amidst the former managementβs continued use of the Gainax brand, and to Khara and other related companies for their efforts in organizing and transferring intellectual property while prioritizing the interests of directors, writers, and creators.
Most importantly, Gainax offered sincere thanks to its fans for their unwavering support over the past 40 years. This announcement marks the end of an era for a studio that has left an indelible mark on the world of animation.
Following the announcement regarding the bankruptcy proceedings on the Gainax official website, Studio Khara provided additional information from their perspective. Considering their relationship with Gainax and its current management structure, Khara posted this comment on their official website.
Gainax was the former company of Anno Hideaki, the representative director of Khara. However, Anno founded Khara in 2006 and left Gainax the following year in 2007.
He has since become a shareholder of Gainax. Khara had been aware of Gainax’s poor management and debt for some time, and Anno expressed his concerns to Gainax’s management and made proposals for improving the company’s management, but these were not accepted for a long time.
Despite this situation, Khara accepted the proposals of Gainax’s management at the time and even provided supportive loans. However, Gainax’s situation did not change, and it continued to worsen, culminating in the arrest of the then-presidential director in 2019 on a criminal offense unrelated to the company’s operations.
Following the arrest of the former CEO of Gainax, Khara’s CEO, Hideaki Anno, sought cooperation from KADOKAWA, King Records Co., Ltd., and Trigger Inc. to prevent reputational damage to the Evangelion series and other related works.
Anno revamped the management team by having representatives from each company serve as directors. Khara has been working with its partner companies to understand the inner workings of Gainax, at the very least resolving unpaid payments to studios, writers, and creators within the animation industry, and preventing the loss of intellectual property and documents.
However, as stated in the Gainax release, by the time Khara understood the situation, they found themselves in an unmanageable state of debt, and Gainax concluded that it would be difficult to continue operations.
In light of this situation, to ensure that creators, original authors, and writers can continue to produce and manage their works in the future, Khara has worked with each production committee to confirm and organize the rights and transfer them to the companies and individuals they deem most suitable.
In order to alleviate some of the debts owed to the many people in the industry, Khara considered seeking support from their company, but this would have resulted in the unreasonable situation of having to guarantee the debts of the former management team and the former representative director, making it impossible to make sufficient repayments.
Khara expressed their sincere gratitude to the new directors and the companies they represent for their cooperation in the reorganization and transfer of intellectual property and its future management, prioritizing the authors and creators. They also expressed gratitude to the production committee companies for their efforts.
Finally, Khara noted their sadness that an animation studio with a history of nearly 40 years has come to an end in this manner. Regarding the GAINAX trademark and title, as stated in the Gainax release, Khara has acquired and is managing it.
In addition, Khara clarified that “Gainax” is a separate legal entity from similar companies such as “Gaina Co., Ltd. (Studio Gaina)” and “Fukushima Gaina” (both of which were formerly known as “Fukushima Gainax”), “Gainax International,” “GAINAX Kyoto,” “Yonago Gainax,” “Gainax Niigata Co., Ltd.,” and “GAINAX WEST,” and there are no trademark license agreements between Khara and the above similar companies. Khara also referred readers to Diamond Online’s past coverage of this matter.
