A dark cloud descended on Swiss cinema at this week's Locarno Film Festival with the news that Lausanne-based producers MAX-LeFilm and Cinemagination have been forced to declare bankruptcy after the flop of their $27.5m (CHF 30m) animation feature Max & Co.

Billed as the most expensive Swiss film of all time, the ambitious project by the brothers Frederic and Samuel Guillaume had only managed to attract 16,000 cinema-goers into the cinemas in the first two weeks when it was released by Walt Disney last February.

The film had opened with 63 prints- similar to the scale of release for such previous local blockbusters as Grounding or Mein Name Ist Eugen- and the producers had reckoned with 110,000 admissions in Switzerland.

A recipient of the Audience Award at the International Animation Festival in Annecy last year, Max & Co. has since posted only 29,692 admissions in Swiss cinemas.

It was co-produced with partners from the UK (Future Films), Belgium (Nexus Factory) and France (Cine-Manufacture), with international sales handled by Wild Bunch.

Speaking to public broadcaster TSR, Nicolas Bideau, head of the film section at the Federal Office for Culture (BAK), said he would be meeting the producers and filmmakers next week. 'We must look into the reasons for the bankruptcy as well as the consequences for the relations with the Federal Office for Culture. It will take months to find out what actually happened.'

BAK had put up $1.37m (CHF 1.5m) of the film's $27.5m (CHF 30m) budget which included $23m (CHF 25m) from private investment sources.

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