The foreign sales arm headed by Jim Harvey closed on Jul 31. Harvey, who took over the reigns after John Fremes left to join Jere Hausfater at Essential Entertainment earlier this year, was informed of the move a week before the company closed.
No official reason has been given, however it is understood that EFI's demise was triggered by a lack of fresh product flow and the disappointing domestic performance by one of EFI's marquee titles, the Kevin Costner thriller Mr Brooks.
Harvey's sales slate included the Michael Keaton drama The Last Time, comedies Boy Town Rock, Funny Money and College, and thriller The Sweet Spot.
Details of the restructure are expected to be announced shortly, however in a brief telephone conversation with Screendaily, Element Films president Adam Rosenfelt stressed that Element's domestic output deal to supply Lionsgate with nine films remained in place.
Rosenfelt did not return follow-up calls to clarify the situation further or discuss the restructure.
The Lionsgate deal is set to expire in 2009 and to date the only release has been Pride, which opened last March and grossed a disappointing $7m. A source at Lionsgate confirmed the deal was not affected by the closure of EFI and remained in place.