Iconic anime studio Gainax announced on Friday that it filed for bankruptcy in the Tokyo District Court on May 29. This announcement comes months before the studio’s 40th anniversary in December, marking a sad milestone for the once-celebrated company known for its influential contributions to the anime industry.

Gainax detailed its financial troubles since 2012. The studio cited several reasons for its decline, including mismanagement of a restaurant venture, a poorly run CG company, large unsecured loans to executives, and business practices resembling a small personal venture. These financial missteps led to significant debts, resulting in Gainax being ousted from production committees due to unpaid royalties. The studio faced multiple lawsuits, further exacerbating its financial instability.

During this period, several affiliated companies were established under the Gainax name in various regions. These affiliations led to numerous resignations from the main studio and a loss of animation production capabilities. These companies eventually declared independence from the main Gainax studio. Additionally, the situation worsened when Tomohiro Maki, who had led Gainax since 1992, transferred shares to an individual with no filmmaking experience in 2018. Maki’s arrest in December 2019 for semi-coerced indecent acts further crippled the company, leaving it unable to operate while burdened with substantial debt.

In February 2020, Gainax revamped its management team and began collaborating with the studio Khara, a creditor, to review its financial situation. They uncovered extensive borrowing from financial institutions, defaults on industry debts, and unauthorized sales and transfers of intellectual property and production materials. Despite efforts to manage the intellectual property and scattered materials properly, the studio was unable to overcome its overwhelming debt. After being sued by a debt collection company in May, Gainax decided to cease operations and file for bankruptcy.

Gainax clarified that it has no current affiliation with other entities that previously bore the Gainax name, such as Gaina/Studio Gaina and Fukushima Gaina. The studio Khara has acquired the Gainax trademark and now manages it. Gainax stated it would provide updates on the future use of its managed works after the bankruptcy proceedings conclude.