Citing intense competition that presumably led it to charge studios less for its work than what it cost to produce, Marina Del Rey-based special-effects house Rhythm & Hues has filed for Chapter 11 bankruptcy. It thereby exposed the shaky foundations of similar special-effects studios and raised questions about its ability to complete projects for at least three different studios that it is currently working on. The studio that digitally created the tiger in Life of Pi, for which it won a BAFTA award last weekend, and which has been nominated for Pi and Snow White and the Huntsman in the Oscar race, said in its bankruptcy filing that its costs to complete the films it is currently working on for Universal, Fox and Warner Bros. exceeds the remaining amounts due. It will therefore be unable to complete them at the bid amount. While Universal and Fox was willing to come up with additional funds to allow R&H to complete the work on their films, Warner Bros. was not and, according to the filing, demanded return of all materials related to its three projects. The head of another effects house, who asked not to be named, told the London Independent, It is a sad day when such a respected company faces issues like this. Many will be thinking: 'There but for the grace of God.' William Sargent, CEO of U.K. company Framestore, said that the special-effects industry is in a tough place because studios slowed down in 2012 and didn't shoot much. Margins are tight. ... It calls for careful navigation.
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