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Utah's VidAngel files for bankruptcy, pausing court fight

FILE - Employees work at VidAngel's office in Provo on Wednesday, July 20, 2016.
FILE - Employees work at VidAngel's office in Provo on Wednesday, July 20, 2016.
Spenser Heaps

SALT LAKE CITY — A Provo-based company allowing users to filter nudity, profanity and violence out of movies and TV shows has filed for bankruptcy, putting the brakes on a legal fight with movie studios in federal court.

VidAngel CEO Neal Harmon announced the filing in a Wednesday news release, saying it gives the company breathing room to focus on its new platform, which is in large part geared at streaming, as opposed to the previous version, which focused on discs and led to a federal lawsuit in California from several studios.

The Utah company has argued the 2005 Family Home Movie Act allows for its method of filtering and streaming content to its customers. But the 9th Circuit Court of Appeals disagreed in August, rejecting VidAngel's appeal against Disney, Warner Brothers, 20th Century Fox and LucasFilm.

Now, Harmon's company is seeking a new court order in Utah stipulating that its new service is legal. In September, it sued several studios in Salt Lake City's U.S. District Court.

VidAngel launched its streaming service-based filtering approach in June, which offers filtering of movies from licensed streaming services, plus an additional method designed to filter disc movies without using unlawful decryption.

Harmon said in a statement his company would continue offering its filtering service, that it is hiring engineers, and that it has launched its own original series called "Dry Bar Comedy."