Paparazzi outlet Splash News & Picture Agency, currently the subject of a lawsuit filed by the Duchess of Sussex Meghan Markle, has filed for Chapter 11 Bankruptcy protection.
In its bankruptcy filing, the agency cited several reasons for its decision, including the cost of facing two ongoing litigation cases. According to The Hollywood Reporter, the agency had also defaulted on a loan estimated to be worth nearly $1 million.
"Splash's financial problems stem from three sources. As a consequence of the global pandemic, the availability of celebrity images has declined and budgets within media companies have been cut to reflect wider macro-economic challenges," the agency said.
Splash president Emma Curzon said in a statement that the two ongoing litigation cases, including the one filed by Markle, had exacerbated its financial situation.
The agency was sued by the Duchess last year when it took photos of her and her family during a "private family outing" in Canada. Splash reportedly took the photos in Horth Hill Regional Park on Vancouver Island. Previous reports claimed that the case was settled out of court in December, but sources said that the case may still be ongoing.
"The case involves free speech-related issues under United Kingdom law and, unfortunately, has proven to be too unbearably expensive for Splash to continue its defense," Splash said in its bankruptcy filing.
The agency said that if it were to lose the case, the courts would likely slap it with substantial attorney's fees in favor of the plaintiffs. Splash said that it had attempted to settle the case but both parties have not reached a financial agreement that was within the company's resources.
Markle recently won a similar case against publisher Associated Newspapers.
The Duchess sued the company over its decision to publish parts of a letter she had written to her now estranged father, Thomas Markle. The courts ruled that the publisher, through its publications The Mail and Mail Online, breached Markle's privacy when it published parts of the letter without her consent.
