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After Chapter 11 Bankruptcy, Los Angeles Visual Effects Studio Rhythm & Hues Acquired By Prana Studios

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Rhythm & Hues Chapter 11 Outcome

Academy Award-winning visual effects and animation studio, Rhythm & Hues, was acquired out of a Chapter 11 Bankruptcy by Los Angeles-based Prana Studios, Inc. At a hearing held in U.S. Bankruptcy Court in Los Angeles at the beginning of April, Judge Neil Bason approved Prana Studios’ affiliate, 34×118 Holdings Inc., as the winning bidder after a two-day auction. Prana Studios Inc. is a U.S. animation and visual effects studio with offices in Los Angeles and Mumbai, India. According to Greenberg & Bass, acquisition is often the best option for a company that finds itself facing bankruptcy and closing its doors.

A global production powerhouse for the creation of visual effects and animation for Hollywood movies, Rhythm & Hues seems an unlikely candidate for bankruptcy or going out of business. The company’s 145 screen credits include The Golden Compass, Babe, and last year’s surprise hit Life of Pi, the 2012 winner for the Oscar for Achievement in Visual Effects. In addition to winning the same award in 1998 and 2008, Rhythm & Hues was also the recipient of four Scientific and Technical Awards from the Academy of Motion Picture Arts and Sciences (AMPAS).

Both sides seem pleased with the outcome. Rhythm & Hues Senior Executive Lee Berger commented, “This is a positive outcome to a difficult situation and we are thrilled to be able to put this process behind us. We are grateful for Prana’s support, as well as the support of their investor group, and are excited to begin the next chapter of R&H’s history.” Speaking for the acquisition team, Jeffrey A. Okun, Senior Vice-President, VFX, Prana Studios said, “Our partnership will allow R&H to continue the business of creating world-class digital imagery. With the additional support of our strong investor group, we are confident R&H will continue to be the innovative quality leader that they’ve been for 30 years.”

If your once thriving entertainment company is contemplating a Chapter 11 Bankruptcy to deal with mounting debts, you are not alone. Greenberg & Bass has seen many Los Angeles-based entertainment companies struggle with both the recession and the changing tides of technological evolution. If your company has payroll tax problems or outstanding tax debts, Greenberg & Bass works with the Tax Resolution Institute to provide the best tax resolution services available. The key is to ensure the tax debt is dischargeable in a bankruptcy filing. Please call Greenberg & Bass and the Tax Resolution Institute at 800-401-5926 to set up a free consultation and find out whether a Chapter 11 bankruptcy filing and/or tax resolution services make the best sense for your company.