Could things get worse for visual effects facility Rhythm & Hues? Apparently so.
When things seem to be at their darkest for the Oscar-winning studio, a glimmer of hope appears on the horizon, only to fade each time. First, an expected deal between the studio and Prime Focus fell through. R&H then was forced to file for Chapter 11 bankruptcy protection last month. However, R&H was given a bridge loan by three studios to keep the company afloat until April, when work on a number of big films would be completed. Now, however, there are reports that the studio needs to be sold by mid-March or it will run out of money to complete the pending work. As a result, the studio has requested that court act quickly on the auction process to sell the facility.
The bridge loan came from Legendary Pictures, Universal Studios, and 20th Century Fox.
It all adds up to a vicious cycle. The studio needs an influx of cash to continue work and, importantly, to get new work so that it can pay off its debts. A good deal of that involves employees, as the studio recently laid off approximately 250 staffers while many others say they are waiting to paid.
A sale would create stability at R&H so that it could retain its creative and production teams, as well as the business of its largest customers.
More than a dozen entities are said to be interested in purchasing the studio.