Visual effects company Rhythm & Hues Studios Inc., which filed for bankruptcy protection last month, is to be acquired by a company closely tied to competitor Prana Studios Inc., according to people familiar with the situation as per the recent article on Wall Street Journal.
The auction turned out to be a difficult and drawn-out process. Early on in the process, Psyop and a Taiwanese bidder with ties to electronics manufacturer Foxconn could not or would not show proof of financing, and were eliminated. Three bidders remained: Prana, Prime Focus and Brave Vision, a Chinese company led by Jiang Yanming, a founder of vfx & post facility Technicolor Beijing, and co-founder, president and largest shareholder of China Lion.
Prana is a visual effects and animation studio with offices in Los Angeles and India. It was founded as an American company but does much of its animation production through an Indian subsidiary.
Rhythm & Hues, based in El Segundo, filed for bankruptcy protection under Chapter 11 of the federal bankruptcy code last month after laying off 250 employees, citing several factors, including foreign film tax subsidies and a falloff in feature film work form its major clients.
Prana is expected to assume responsibility for a nearly $16-million loan extended to Rhythm & Hues by Universal Studios and 20th Century Fox. The loan was part of the effects company's plan to avoid liquidation, enabling it to complete work on current projects, including “R.I.P.D.” and “Percy Jackson: Sea of Monsters.”
Source: Wall Street Journal& Variety