Cinar Corp has fired its co-founders Micheline Charest and Ronald Weinberg as employees of the company and asked them to step down as directors.
The move is seen as a way for the embattled company to distance itself from the tarnished image of its founders, who have been on leave since March when the Cinar was hit with allegations of tax fraud.
Cinar has also reported it is still unable to provide accurate financial statements for the past three years and that it will vigorously defend itself against legal proceedings taken by BRB Group, a film production and distribution company based in Spain, which is claiming C$78m for breach of contract.
Although no announcement has been made, the company's assets are expected to be sold off by the end of the year.
Charest and Weinberg founded Cinar in 1976 on a platform of providing non-violent quality programming for children. The two became a Canadian success story as they built the company into an international producer and distributor.