It was reported earlier this week that Rhythm & Hues Studios, the visual effects company nominated for two Oscars for “Life of Pi” and “Snow White & The Huntsman,” plans to file for Chapter 11 bankruptcy.
Originally, the plan was for Prime Focus to buy Rhythm & Hues. Until then, three studios had given a $20 million bridge loan to the visual effects company. This money was supposed to float the company until the sale to Prime Focus. This would allow for Rhythm & Hues to continue working on a number of projects, including “The Hunger Games: Catching Fire” and “Percy Jackson & the Sea of Monsters.”
When looking at what happened for an Oscar-nominated company to look into filing for bankruptcy, insiders claim Rhythm & Hues started to run into real difficulties after what would have been a major project canceled last year.
Additionally, with tax incentive offers by foreign and state governments, overall the visual effects industry has taken a hit.
Looking to the future for Rhythm & Hues, there are reportedly others still interested in buying the company once it emerges from the Chapter 11 bankruptcy.
In terms of how this will affect the employees of the company, it is still hard to tell. Overall, between all locations of the company, there are roughly 1,400 employees. Quite often, when businesses start to struggle under financial pressures, the employees also feel the impact through pay-cuts and lay-offs. This in turn ends up leading to individuals seeking out debt relief solutions of their own.
Source: Reuters, “Rhythm & Hues filing for bankruptcy after deal with Prime Focus collapses,” Brent Lang, Feb. 11, 2013
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