The company may attribute their bankruptcy filing to the legal fight with WB in order to make itself look like the victim and deflect blame from itself, but the actual culprit was just plain spending too much money, to the point where they weren’t paying screenwriters. Village Roadshow took on a bunch of debt to finance this debacle:

Former Sony executive Steve Mosko, who joined Village Roadshow in 2018 as chief executive, left this year. He had attempted to build Village Roadshow into an independent studio that produced its own movies and television shows.

But the Mosko-led campaign to remake the company into a full-service studio proved costly and untimely.

Village Roadshow put into development 99 feature films, 166 scripted television series and 67 unscripted series. Of those, six movies and seven television series went into production. “No film or television series that was produced was able to create a profit that could sustain the studio business,” Maib wrote.

So Mosko cratered the company with a half-baked plan and then danced away without consequences. Variety says:

Mosko, well-liked and deeply experienced, will have his pick of new corporate jobs. Some individuals close to his thinking said he may take a stab at producing on his own.

Also note:

Village Roadshow’s library assets generate about $50 million a year in revenue, according to Maib’s declaration.

They literally would be better off if they had just done nothing.