Those waiting to hear the results of the bankruptcy auction for troubled visual effects studio Rhythm & Hues will need to wait at least one more day.
According to a report by The Hollywood Reporter, R&H and its counsel, Greenberg Glusker, have asked the court to continue its hearing at 10 a.m. PDT Friday and planned to reopen the bidding discussion at 4 p.m. Thursday.
The auction was scheduled to begin Wednesday morning. It proceeded until 2 a.m. and continued Thursday at the offices of its reorganization counsel Greenberg Glusker.
Mumbai-headquartered Prime Focus -- which also maintains bases in Los Angeles, New York, London and Vancouver -- is believed to be one of the remaining bidders. The company offers visual effects, animation and 2D to 3D conversion among its services, and it upcoming work includes The Great Gatsby and White House Down. On March 20, Hong Kong-headquartered private equity firm AID Partners Capital Limited made an investment of $10 million into Prime Focus. AID Partners also has an investment in Legendary Pictures, for which R&H is currently completing work.
A Chinese company, China Lion, was also thought to be a remaining bidder, though the company denied this via a tweet that read: "China Lion is NOT involved in R&H bidding."
Thursday morning, South Korea’s JS Communications filed a conditional objection in connection with the auction. JS had pulled out of being the stalking-horse bidder after it missed its Court mandated deadline of March 19 to execute a binding asset sale and purchase agreement in connection with its stalking horse bid.
But in Thursday morning’s filing, the company argued that the R&H has “invited bids that improperly violate this court’s procedures order so as to deny JS its court-approved breakup fee.”
Specifically, it cited the court order that all bids increase the cash component by at least $525,000, so as to trigger and fund the $425,000 breakup fee. The document said: “This court should not tolerate such a shell game.”
R&H, the company behind the majority of the Oscar-winning VFX in Life of Pi, filed for chapter 11 bankruptcy protection February 13.
The company remains operational thanks to $17 million in loans from Universal and Fox enabling the studio to continue work on Universal's R.I.P.D., scheduled for release July 19; and Fox's Percy Jackson: Sea of Monsters, scheduled for August 16.
Also keeping R&H going is $5 million in financing from Legendary, which will pay R&H for the completion of VFX work on its movie, Seventh Son, which Warner Bros. plans to release October 18. R&H is a co-investor/co-producer on this film.