LOS ANGELES -- Bankrupt visual effects company Rhythm & Hues has found a stalking horse bidder, according to the Los Angeles Times.
In a filing in U.S. bankruptcy court in Los Angeles late Thursday, the company behind the lifelike tiger and other effects in Life of Pi, which won the Academy Award last month for best visual effects, said it has received a bid worth about $17 million from South Korean Media company JS Communications Co. Ltd.
Peter S. Fishman, a director at advisory firm Houlihan Lokey, which is helping to facilitate a sale, said in a filing that JS’s letter of intent “offers the best terms for the estate and its creditors of the proposals received.”
JS is offering to assume nearly $16 million worth or debtor-in-possession loans from two studios for which Rhythm & Hues is doing work and to pay $1 million in cash to help satisfy other liabilities.
Fishman said that Houlihan has received non-disclosure agreements from about 20 prospective buyers, of which around 10 have conducted on-site due diligence. He said he expects to receive more bids before a proposed deadline of March 22.
Any other bidder would have to offer at least $775,000 more according to the terms of JS’s letter of intent. The South Korean company would receive a break-up fee of $675,000.
Under the terms of its offer, the court must approve JS as the stalking horse bidder on March 8.
Rhythm & Hues, which filed for Chapter 11 on Feb. 13, can continue to operate until March 29 with its current resources, the filing said.