U.S. Bankruptcy Court Approves Sale of Rhythm & Hues

U.S. Bankruptcy Court Approves Sale of Rhythm & Hues

A Prana Studios subsidiary buys the VFX house for some $30 million

A company with ties to visual effects/animation house Prana Studios–with offices in L.A. and a subsidiary in Mumbai, India–has submitted the winning bid to acquire Rhythm & Hues, the Oscar-winning VFX studio that filed for Chapter 11 bankruptcy protection last month. The purchase price is about $30 million, with the deal receiving final approval from the U.S. Bankruptcy Court on Friday after a brief delay when two former bidders filed objections.

The acquisition of Rhythm & Hues is being made by 34×118 Holdings, a wholly owned affiliate of Prana. The new owner assumes responsibility for some $16 million in loans from Universal Studios and 20th Century Fox which have helped Rhythm & Hues to keep operations going this past month–despite the layoff of 250 employees–so it could complete VFX work on current projects, including the features Percy Jackson: Sea of Monsters for Fox, and R.I.P.D. for Universal.

Prana reportedly beat out bids that included one from Psyop, another from India’s Prime Focus (which already maintains operations in Hollywood), and a Chinese venture affiliated with the president of film distribution company China Lion. The original stalking horse bidder–one intended to spark other competing bids–was JS Communications, a South Korean entertainment firm that pulled out of the running last week.

A visual effects team–led by Bill Westenhofer of Rhythm & Hues–won the Best Visual Effects Oscar last month for Life Of Pi, just 11 days after Rhythm & Hues filed for bankruptcy.

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