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Icebox Halves Staff, Gets Sued & Sells Toon To Fox

In a restructuring move, Icebox.com has cut its staff of 100 in half. The decision was made in an attempt to make the company profitable by the end of next year. Icebox will no longer produce its content in-house, but will use freelancers some being the laid off employees -- and Flash animation production firms. Company CEO Steve Stanford reassured the industry that Icebox has US$2 million on hand, but needed to convince investors that the company is close to profitability. Stanford said that a new round of about $10 million in financing should close next month. One way Icebox feels it will make money is licensing its series to television. Currently the Web company is developing a live-action series for Showtime based on its toon STARSHIP REGULARS. On Tuesday, November 28, 2000, Icebox also announced that it has signed a deal with Fox to have FUTURAMA writer-producer Eric Kaplan draft a pilot script for a live-action rendition of the Webtoon ZOMBIE COLLEGE. The series follows a young student who passes on going to MIT to attend zombie-infested Arkford College to be with his girlfriend. If the series is picked up Icebox with gain revenue from executive producing fees. In addition to outsourcing production, other options the company is looking into to make a profit are banner ads, Webtoon syndication and a possible small monthly subscription fee to view popular Icebox content. However also on Tuesday, Flash production house WireBreak filed a suit against Icebox alleging a breach of contract and unjust enrichment over non-payment on WireBreak-produced TWISTED: A COMEDY GAME SHOW. On August 30, WireBreak entered into an agreement with Icebox to produce 10 Webisodes of the series, receiving $6,000 on delivery of the script and $18,000 when each episode was completed. The suit claims that "outside ofnormal feedback between the two companies, Icebox did not express any dissatisfaction with the quality of either the scripts or episodes upon their delivery to Icebox." After the first delivery of Webisodes on September 11 WireBreak did not receive payment as described in their contract. Icebox's accounts payable department told WireBreak it would be paid by October 18 and on October 12 Stanford informed WireBreak CEO David Wertheimer "that Icebox wanted to renegotiate the terms of the agreement and did not intend to pay the amounts owed until the companies had reached a new agreement." According to the suit, WireBreak tried to negotiate with Icebox from October 12 November 6, but had its offers turned down and then ignored. On November 6, Wirebreak says that Icebox began to refuse delivery of Webisodes 8 through 10. Icebox claims that the program didn't meet the company's standards and that they have paid WireBreak for the content received. However, WireBreak claims that their payment of $60,000 on October 20 is "a fraction of the amount due at that point." On November 6, WireBreak sent a letter to Icebox demanding payment of the $144,000 still owed them or that their company would file suit against Icebox after November 10. On November 9, Icebox replied saying that the Webisodes received had technical difficulties and that if "'WireBreak insists on holding Icebox to the letter of Agreement, this will be the last transaction of business conducted between Icebox and WireBreak.'" WireBreak was started by Wertheimer, former president of Paramount Digital Entertainment, in September 1999 as a destination site, however the firm has now restructured into a strictly syndication production firm.

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Rick DeMott
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