The iconic Japanese animation studio Gainax, celebrated for creating hits such as Neon Genesis Evangelion, Royal Space Force, Gunbuster, and more, has declared bankruptcy at the Tokyo District Court after being in operation for 40 years. Multiple factors influenced this decision, with the predominant cause being mismanagement by the company’s leadership.

The managerial issues were glaringly visible in 2012, highlighted by ventures into economically unviable restaurant businesses, the hasty creation of a CG company without a strategic plan, large unsecured loans to executives, and failed investment projects, treating the company more like personal property rather than a professional enterprise.

Missteps by the management led to substantial financial liabilities, resulting in Gainax being ousted from various committees for failing to pay royalties, facing loan-related lawsuits, and a significant dip in its anime production capabilities. Gainax’s expansion through the establishment of affiliate companies in more rural areas further exacerbated the situation, causing a mass exit of talent and, ultimately, a detachment of these companies from Gainax, refusing any management liability.

In a dramatic turn of events in 2018, the studio’s long-term head, in position since 1992, transferred shares to an administrator with no background in video production, with the endorsement of the then-management. This individual faced legal charges for sexually assaulting a minor soon after being named CEO, and despite grappling with severe debts, ended his operational capacities within the company.

To tackle the scandal left by the previous CEO and rectify the studio’s trajectory, Gainax underwent a management overhaul in February 2020, backed by creditor Color Co. The new team embarked on an extensive review of the company’s records to grasp the full extent of the financial and operational ruin. It was discovered that Gainax had defaulted on numerous loans from financial institutions, failed to meet payment obligations within the anime sector, and had unlawfully sold and transferred intellectual properties and production assets without proper authorization.

Through the efforts of Color Co and the newly instated directors, Gainax collaborated with associated entities to secure the rights of their productions, safeguard the interests of artists and creators, and ensure the appropriate management of the dispersed intellectual properties, Gainax attempted to set a foundation for each production committee to handle the leading works subsequently. Despite these attempts, the overwhelming debt incurred during the prior administration remained insurmountable.

On May 2024, facing a lawsuit from a debt collection agency, Gainax evaluated its inability to sustain operations and made the difficult decision to file for bankruptcy.

CEO of Gainax, Yasuhiro Kamimura, stated in the press release:

“As the old management continues to operate under the Gainax brand without any regard for this plight, I would like to express my gratitude once again to the newly structured directors who cooperated with us despite the lack of remuneration, and to the related companies such as Color, which put the directors of the companies, writers, and creators first in the consolidation and transfer of intellectual property.

Above all, I would like to express my sincere gratitude to our fans for their support over the past 40 years.”

This development is undoubtedly a disheartening moment for fans of the studio and its landmark series.