WordWorld, the production company behind a three-time Emmy-winning children’s public television show that helps pre-schoolers learn to read, filed for Chapter 11 bankruptcy on Feb. 10.
The move is part of a larger corporate restructuring, according to a statement from the company.
“The company’s current capital structure, operating losses and liquidity restraints made it challenging to raise required capital outside of a Chapter 11 filing, and the upfront costs for building the intellectual property, television series and brand were substantial,” the statement reads.
Chief Executive Don Moody Jr. said that the company’s debt problems were a classic example of the rapid growth of a “great brand” outpacing its recognition among potential customers.
“The licensing side doesn’t start to grow until you have the exposure,” he said. “We grew very fast.”
Though Mr. Moody and his cousin, Jacqueline, only created the WordWorld program in 2007, they have already expanded the broadcast licensing to more than 90 countries and 11 languages, along with the requisite stable of toys, DVDs, software and sippy cups.
Mr. Moody attributes the show’s success among educators and parents to its unique proprietary “word-building” concept—the company boasts that partial funding comes from the U.S. Department of Education—plus high 3-D animated production values. But because of the chill in the industry over the past few years, the company struggled to keep pace with costs.
“We’ve already cut our overhead to the bone,” Mr. Moody said. Now, he said, it’s just a matter of “cleaning up the balance sheet.”
Kellie Specter, a spokeswoman for WNET/Thirteen television in New York, said that regardless of the bankruptcy filing, the show is “a big part of the kids’ block” on the PBS outlet and said the network planned to continue airing it.
According to WordWorld’s bankruptcy filing, the Manhattan-based company had liabilities totaling $10 million to $50 million and assets of $1 million to $10 million. Nearly $3.3 million is owed to PCEP II WW Holdings of Fort Lee, N.J., the company’s largest creditor. The next largest creditor is Crest Animation Studio in Mumbai, India, which is owed some $2.2 million.