Lawsuit City

Not against the Big Boys this time, but a well-loved VFX and animation studio that went bankrupt just as it won an Academy Award.

... On Friday, two years after Rhythm & Hues filed for Chapter 11 bankruptcy, the Trustee in the case brought a new complaint against the company's former officers and directors, including John Patrick Hughes, Pauline Ts’o and Keith Goldfarb. The suit presents a different take on what led R&H to go bust.

"While claiming to promote a caring and artistic corporate culture that enhanced R&H’s value, Hughes, Ts’o and Goldfarb breached their duties of loyalty, due care, and good faith by directing R&H to engage in risky transactions with entities they or their family members owned or controlled," states the complaint. ...

The suit alleges Hughes transferred millions of dollars to CCCD Diagnostics, a biotech startup company founded by his father-in-law, in return for unsecured notes that were eventually sold to him for one dollar. This biotech company is said to have had no revenues and a business "wholly unrelated to R&H's business." ...

That corporate chieftans are known to lie and plunder is not exactly world-shaking news. But for years Rhythm and Hues was held up as a shining model of employee-management relations.

When I was at a meeting of employees in the final days of Dream Quest Images, a visual effects studio that had been purchase by Disney and was being merged into Disney Feature Animation (and also becoming part of a Disney-IATSE contract), a Dream Questor stood up in the back of the hall and said

"I hope this merger will be good for us, but I'm not sure it will be. A bunch of us have worked for Rhythm and Hues, and they really know how to treat employees right, how to look out for them. I'm nervous if becoming part of Disney Feature is going to do that for people here". ...

Rhythm and Hues was held up as the gold standard for pay, working conditions and benefits in the VFX industry for a long time. To find out that things might not have been as employees thought they were is a chronic down trip.

But then, there have been lots of chronic down trips in the VFX world of late. What's one more?