Saturday, March 9, 2013

Rhythm & Hues selects stalking-horse bidder

LOS ANGELES (TheWrap.com) - Rhythm & Hues Studios, the bankrupt visual-effects company behind "Life of Pi" and "Babe," has found a stalking horse bidder, a spokeswoman told TheWrap.

JS Communications Co., a South Korean media company, has signed a letter of intent to buy the studio.

In bankruptcy cases, a stalking-horse bidder is selected from a pool of bidders so a financially distressed company can ensure that its assets are not undersold at auction.

The stalking-horse bid represents the lowest acceptable offer; other suitors will be required to submit qualified bids by March 12.

Time is of the essence. In court filings this week, Rhythm & Hues said it needs to be sold by mid-March or it will run out of money. It asked a bankruptcy court judge to approve speeding up its auction process.

After filing for bankruptcy, the company secured $20 million in bridge loans from Legendary Pictures, Universal Studios and 20th Century Fox Studios so it could continue working on a handful of film projects, but it has said that it does not anticipate being able to attract more work until it finds a new owner.

The studio has retained the financial advisory firm Houlihan Lokey to help it find a buyer. Houlihan Lokey said the sale has attracted interest from roughly 20 parties. The deadline to submit competing bids for Rhythm & Hues is March 22.

If the stalking-horse bid is unsuccessful, JS Communications will receive a breakup fee of no more than $150,000, according to court filings.

(Pamela Chelin contributed to this report)

Source: http://news.yahoo.com/rhythm-hues-selects-stalking-horse-bidder-231439144.html

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