German media giant KirchGroup's bankruptcy has brought work on animated feature film Heidi to a standstill and may threaten the future of animation specialist TV Loonlands' Budapest facility after payments from group subsidiary TaurusProduktion, the film's co-producer failed to materialise.

Animation specialist TV-Loonland, the film's other co-producer was forced to lay off 100 freelancers at its Budapest-based studio Loonland Animation following the missed payments.

TV-Loonland told local press that the 12 permanent members of staff at the Hungarian studio had been retained and that the Heidi project had 'only been put on ice and will 100% continue production'. The freelancers would likely be re-hired if production cranks up again at Loonland Animation.

The fate of TV-Loonland's Budapest facility is understood to be dependent on whether TaurusProduktion stays onboard Heidi, or whether other co-production partners have to be brought to the project.

The halt to production, which is saving TV Loonland around Euro 100,000 each month, means release dates - an international opening in May 2003 and the German release at the end of 2003/beginning of 2004 - will have to be put back.