Splash News & Picture Agency, the paparazzi business which is engaged in a legal battle with Meghan Markle, has filed for Chapter 11 bankruptcy, according to The Hollywood Reporter.

The company's downfall is attributed to the coronavirus pandemic, which has made it difficult to obtain images of celebrities, as well as two ongoing litigation cases exacerbating the financial struggles of the business. One of the two cases is the battle with Markle, who said the paparazzi took photos of her during a "private family outing" in a park in Canada. A Splash spokesperson has since apologized for the incident, saying it will no longer "take unauthorized photographs of the family of the Duke and Duchess of Sussex."

But the case remains unresolved and continues to add to the financial hurdles of the business.

"Splash’s financial problems stem from three sources," the company's president, Emma Curzon, stated in a declaration submitted as part of the bankruptcy. "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. This situation has been exacerbated by two ongoing litigation cases and the costs of defending these cases."

Curzon said the case with the royal family has been "unbearably expensive."

"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," the president stated. "Furthermore, if the plaintiffs were to prevail in that case it would likely result in a large attorney fee award against Splash. Notwithstanding the merits of the case the company has sought to settle this matter but has been unable to agree [on] a financial settlement within its resources."

Splash is also caught up in a battle with its former account manager, Esmeralda Servin, who says she repeatedly faced sexist remarks at the company and became terminated after raising concerns about issues such as transparency and illegal bidding.

Through the years the company has been suing celebrities for posting copyrighted images of themselves. The copyright infringements, which brought in about $118,000 in 2020, declined during the pandemic, totaling $21,000.

According to The Hollywood Reporter, Splash is now seeking the protection of a Nevada bankruptcy court, having defaulted on a loan worth nearly $1 million.

Markle's law firm, Schillings, released a statement on their battle with the agency, saying "unlawful, invasive, and intrusive paparazzi behavior will not be tolerated, and that the couple takes these matters seriously — just as any family would."

In the last two years, Markle and Prince Harry have filed five lawsuits against media organizations, including U.K. newspapers and paparazzi agencies, according to Newsweek.

The latest incident with the paparazzi happened earlier this month, just days after filming their tell-all interview with Oprah Winfrey. The photos, which were taken while the couple was in their car in California, were published by the Daily Mail online and credited to Backgrid, a paparazzi agency that has previously photographed the family.

Splash, which was formerly based in the United Kingdom, is now a U.S. agency, Newsweek reported.

Splash News & Picture Agency

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