UPDATE, 8:28 PM: Rhythm & Hues just confirmed Deadline’s report in a press release. The VFX studio says it expects a “competitive auction” on March 27, which will be decided in court on March 28. But don’t count JS Communications out yet: I’m told they’re still exploring their options and may still throw their hat into the ring. “I looked at the company and due to the nature of this business, one missing component was cooperation from the studios because the work comes from them”, JS Communications’ David Shim told Deadline, adding that he’s “still working to have a dialogue with the studios”.
PREVIOUS EXCLUSIVE, 6:57 PM: JS Communications was approved earlier this month as a stalking horse bidder in the ongoing Rhythm & Hues bankruptcy case, which would have guaranteed a minimum bid in the VFX shop’s upcoming auction. But the South Korean media company confirmed to Deadline that it failed to submit a firm purchase agreement for Rhythm & Hues’ assets by today as mandated by the court. READ MORE »
UPDATE, 5:25PM: A federal bankruptcy court today approved JS Communications’ stalking horse bid for the financially troubled Rhythm & Hues. With the South Korean media company now firmly in place to bid on the company, the auction process out of Chapter 11 will begin. If no other bidders put their name in the hat, the VFX house will belong to JS Communications by the end of the month. However, court documents show that several other parties have expressed interest in Rhythm & Hues but JS is the only one to have their name made pubic. The court also ordered Friday that JS would receive a $425,000 break-up fee if another bidder buys R&H. That’s $250,000 less than the $675,000 the company wanted. Additionally the court said that the utilities cannot be turned off at R&H’s HQ and the company can pay pre-bankruptcy wages due to execs Prashant Buyyala, Keith Goldfarb and John Hughes if it chooses.
PREVIOUSLY, 10:26 AM: JS Communications Co wants a judge today to give it stalking horse status in bids for the assets of bankrupt VFX house Rhythm & Hues. In a letter of intent dated Thursday and signed by Managing Partner David Shim, the South Korean media company says it wants to acquire the Oscar winning company by the end of the month. “We are prepared to proceed with our due diligence and negotiate a Definitive Agreement as soon as possible,” says JS Communications’ letter. However, the Korean company insists it will only proceed with its bid if it is officially given the stalking horse status in Bankruptcy court Friday. Stalking horse bidders serve to spur other potential buyers to stake out more competitive positions in a court mandated auction process. The El Segundo-based effects studio, which won an Oscar last month for Life Of Pi after laying off 250 workers and seeking bankruptcy protection tapped investment firm Houlihan Lokey Capitol Houlihan Lokey in February to manage a sale. “Several interested parties,” according to a document Read More »
Bankrupt VFX house Rhythm & Hues must find a buyer by mid-March if it is going to recover out of Chapter 11, the company said in a court filing this week (read it here). The El Segundo-based effects studio, which won an Oscar last month for Life Of Pi after laying off 250 workers and seeking bankruptcy protection, tapped Houlihan Lokey two weeks ago to help with a sale as it continued to operate in the short term. Out of 80 entities contacted by the firm, at least 16 have signed nondisclosure agreements and commenced due diligence ahead of a sale hearing proposed for March 19. But according to court documents, the $17 million DIP loan from Universal and Fox and additional $4.9 million from Legendary allocated toward projects for each respective studio will run out by mid-month. If a buyer is not found by then, Rhythm & Hues says it will be unable Read More »