One of the first signs that things will change at Disney under Pixar’s Ed Catmull and John Lasseter, Lasseter informed Walt Disney Feature Animation employees that TOY STORY 3 would cease production immediately, reports the ASSOCIATED PRESS.

The film was announced by former Disney head Michael Eisner the same day that Pixar announced that it was not going to renew its agreement with Disney, who owned the rights to make sequels on its own based on the Pixar film character library. As part of that deal, Pixar had first refusal on all sequels. Disney later formed the Circle 7 division to specifically produce sequels to the Pixar films. Lasseter allegedly told the approximately 100 animators of Circle 7 that their skills would be used in other areas of Walt Disney Feature Animation.

Bradley Raymond was set to direct TOY STORY 3, based on a script by Jared Stern, who pitched the idea to the studio while a participant in Disney's feature animation story development program. Planned to be released in 2008, the film saw Buzz Lightyear recalled to his Taiwan manufacturer after a series of malfunctions, leading to Woody and all the rest of the toys in Andy's room to travel to Asia to save Buzz.