Rhythm & Hues Targets Mid-March Sale

2:55 PM PST 03/06/2013 by Eriq Gardner

The bankrupt VFX house was granted a motion to speed along a sale.

On Friday, a sale of VFX house Rhythm & Hues will be discussed in bankruptcy court.

The debtor in possession of the company is looking to move quickly to get a judge to sign off on a bidding process.

In court papers filed last week, R&H's lawyers wrote, "Given the Debtor's liquidity constraints and lack of long-term financing, the Debtor and its advisors have determined that a sale of the Debtor's assets is the only way for the Company to successfully reorganize."

R&H is still operational thanks to $17 million in loans from Universal and Fox plus $5 million in payments from Legendary Pictures to continue work on several feature films.

That's not enough, say the court papers.

"The Debtor believes that it will be very challenging to get new or additional work from clients while it is still in Chapter 11, meaning that the Debtor will have no additional revenue to offset its current overhead until the Debtor consummates a sale transaction. A sale is therefore needed to create stability, and allow the Debtor to retain both its creative and production team and the business of its largest customers."

On Friday, the parties will discuss providing notice to potential bidders regarding procedures for a sale hearing on March 19 and the deadline for any objections. R&H hopes to close the sale transaction soon thereafter.

"There are some things in the works right now that are encouraging," said Lee Berger, president of R&H's film division. "Nothing is solid and at this time we don't have many details to share."

 

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