Animation studio Rhythm & Hues began informing its employees tonight that they will file for Chapter 11 bankruptcy protection on Monday. According to a report on Deadline, the studio can no longer pay its employees, and some employees are being asked not to come into work on Monday at the studio’s West LA headquarters.

On Monday afternoon, the LA Times reported that 200 people will lose their jobs due to the bankruptcy. The company employs 1,400 people at its studios in LA, Canada, India, Malaysia and Taiwan.

The legendary CG animation studio has been in business since 1987. They have been responsible for such projects as Babe, Scooby Doo, The Golden Compass, the Coca-Cola “Polar Bear” commercials, and Disney’s Animal Kingdom attraction “It’s Tough to be a Bug.” The studio won a BAFTA yesterday for its visual effects work on Life of Pi.

The company had been struggling financially in recent months, and had expected to be acquired by Indian company Prime Focus. Variety notes that while the Prime Focus deal has fallen through, “several buyers reported interested in acquiring the company out of bankruptcy.”

On Monday afternoon, Rhythm & Hues Feature Film Division president Lee Berger released the following statement:

“Tonight R&H is filing for Chapter 11 reorganization in the U.S. Bankruptcy Court and hope to be in front of a Bankruptcy judge in the next couple days. In the meantime, all of our offices remain open, our clients are aware of the process; we have obtained commitments for financing to complete projects in house at the quality level the studios have come to expect. Following the filing, R+H will be seeking to secure financing for future growth. I believe that we are going to come out of this situation stronger, more efficient, and as prolific as we are now.”

If your job has been affected and you would like to submit news confidentially, please contact me HERE.

[UPDATE 2—Monday evening]: The most comprehensive article about the current situation at Rhythm & Hues is this Variety piece by David S. Cohen.

[UPDATE—Monday morning]: The VFX Law blog has a good primer that explains how the bankruptcy affects employees and what workers’ rights are in such a situation.

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Amid Amidi

Amid Amidi is Cartoon Brew's Publisher and Editor-at-large.