Bob Baradaran, managing partner at Greenberg Glusker and longtime attorney of beleaguered effects shop Rhythm & Hues, told TheWrap that the company was the victim of a “perfect storm” that swept the Oscar-winning studio into bankruptcy last year.

“It was just the perfect storm of the technology being available globally and labor costs in the U.S. being higher than in other jurisdictions,” Baradaran said. “Studios want to keep their budgets in line, but they still want to make all sorts of changes and do different things with their movies, but they don’t want to pay for them.”

Instead, it is vendors such as Rhythm & Hues that shoulder many cost overruns on projects, because unlike other production industries such as cinematography or editing, visual effects companies are asked to submit fixed bids. They are not paid hourly rates for their work.

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