A company tied to the Los Angeles-based effects and animation studio Prana Studios has beat out other bidders to acquire Rhythm & Hues, the Oscar-winning visual effects house that filed for bankruptcy protection last month, a source close to the deal said Thursday night.
The sale, terms of which were not disclosed, is subject to approval by the U.S. Bankruptcy Court at a hearing on Friday morning.
If approved by the court, the sale would end a closely watched auction of one of Hollywood's best known visual effects companies whose financial woes have come to symbolize the challenges faced by an industry that was pioneered in California.
The sale also underlines the growing globalization of Hollywood's post production sector. India's Reliance MediaWorks last year joined China's Galloping Horse film and TV company to acquire the Venice-based Digital Domain, the studio co-founded by "Avatar" director James Cameron.
Prana, which has offices in Los Angeles and a fully-owned subsidiary in Mumbai, India, has done computer animation and effects work on such movies as the 2005 film "Hoodwinked!" from the Weinstein Co. and the 2010 Walt Disney Pictures film "Tron: Legacy."
Rhythm & Hues, based in El Segundo, filed for bankruptcy protection under Chapter 11 of the federal bankruptcy code last month after laying off 250 employees, citing several factors, including foreign film tax subsidies and a falloff in feature film work form its major clients.