JS Communications Co. is the lead bidder for bankrupt Rhythm & Hues, (R&H) a visual effects company that works on movies, including Oscar-winning “Life of Pi.”

R&H filed bidding procedures on March 2 that requires bids to be a minimum of about $17 million – roughly the amount of the company’s debtor-in-possession loan obligations and fees.

JS Communications is a South Korean media company.

At the company’s March 18 auction, bidders looking to top JS would need to pay at least $250,000 more than the stalking-horse bid. After that, bids would need to increase in $100,000 increments. Judge Neil Bason of the U.S. Bankruptcy Court for the Central District of California in Los Angeles would preside over a sale hearing on March 19.

An order approving the bidding procedures was not up as of Monday afternoon.

R&H wants a sale to occur by mid-March in order to preserve the viability of the company, it said in court papers. If a sale doesn’t go through the company would likely have to lay off more of its employees and risk losing its status as an industry leader, it said in court documents.  

The company has worked on more than 150 films, winning awards for “Babe,” “The Golden Compass,” and “Life of Pi.”

R&H produces visual effects and computer-generated animation for the entertainment industry.

Up until just before it filed for bankruptcy, the company had 700 permanent and temporary employees in El Segundo, Calif. After layoffs, the company now has 450 employees.

R&H was forced to file for bankruptcy after its revenue dropped. The company’s revenue has fluctuated over the past few years, court documents show, from $108.9 million in 2009, to $86.7 million in 2010, $121.4 million in 2011 and $95 million in 2012. The 2012 revenue decline was caused partially by a decrease in film production by Fox and Universal, two of the company’s largest customers.

In June 2012 R&H hired Focal Point Partners to pursue strategic options for the company, including a sale. One offer came out of the search, but it was too low, the company said in court papers.

Peter Fishman of Houlihan Lokey is working as R&H’s financial adviser, and Brian Davidoff of Greenberg Glusker Fields Claman & Machtinger LLP is the company’s legal counsel. 

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