Rhythm & Hues bankruptcy reveals vfx biz crisis

By midday Monday, as word spread in the visual effects community of that acclaimed vfx studio Rhythm & Hues would declare Chapter 11 bankruptcy, the already-jittery artists wondered who would speak up for them — and what company would be next.

Eric Roth, executive director of the Visual Effects Society, said he hoped this incident would alert the entire industry to the crisis facing visual effects companies. “From all accounts R&H was a company that appeared, from the outside, to be well run, to take care of its employees, to take advantage of

worldwide tax incentives and have locations in other countries.” Studio sources say the company wasn’t doomed by any financial manipulations or mismanagement, but by a simple cash flow crunch that left it unable to meet payroll.

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