Court Approves Winner in Rhythm & Hues Bankruptcy Auction
Prana Studios Inc. has acquired a visual effects company that filed for bankruptcy protection in February, called Rhythm & Hues Studios Inc. Prana Studios Inc. is a world-class animation company that has done cutting-edge visual effects and used innovative technology. During the bankruptcy auction that took place, Prana had the winning bid of $1.2 million in cash and would also finance other costs up to $17 million that included other payments and debt obligations. Other unfortunate companies such as Prime Focus Ltd. And Brave Vision Investments Limited lost the auction to 34×118 Holdings Inc., which emerged the winner.
Rhythm & Hues filed for bankruptcy protection because many of their movie projects have been delayed as well as 254 of the 718 employees were laid off. The company is popular for winning the visual effects Oscar for “Life of Pi,” which cost them tax subsidies in foreign countries and competition from lower-developing markets. When a company like Prana acquires companies that file for bankruptcy, I believe that it can be beneficial to both. Since Prana is a well-known company for specializing in animation, which can bring success to Rhythm & Hues as well. This acquisition and bring more profit to both companies and decrease their competition in the market.
Written by: Samantha Chin
Source: The Wall Street Journal
Fritz, B. (2013, March 30). Court Approves Winner in Rhythm & Hues Bankruptcy Auction. Retrieved March 31, 2013, from The Wall Street Journal : http://online.wsj.com/article/SB10001424127887324685104578391562557075092.html