More than 400 visual effects artists converge on Academy Awards to demand 'piece of the Pi' as work dries up

The Oscar night red carpet has been hit by a protest over the treatment of visual effects artists in the wake of the closure of a high-profile visual effects company that worked on the Oscar-winning hit Life of Pi.

Several hundred people reportedly congregated outside the Dolby theatre in Los Angeles as the stars walked the red carpet, demanding better treatment for the artists who make the spectacular visuals for blockbuster movies possible. The protest was planned after the well-known Rhythm & Hues effects house filed for Chapter 11 bankruptcy last week, shortly after winning a Bafta for its work on Life of Pi.

Rhythm and Hues' troubles come despite working on a string of highly successful films, including The Lord of the Rings trilogy, Mr Popper's Penguins and The Hunger Games, and winning two Oscars, for The Golden Compass and Babe.

Apart from a march on the street – which Twitter users report has seen more than 450 people assemble, calling for "a piece of the Pi" – a chartered plane has been circling overhead towing a banner with the protest slogan: "Box Office + Bankrupt = Visual Effects vfxunion.com".

When the visual effects team behind Life of Pi attempted to draw attention to Rhythm and Hues' plight during their acceptance speech for the best visual effects Oscar, they were cut off by the band as the speech went on beyond the stipulated limit.

• This article was amended on 1 March 2013 to replace the word "technicians" in the standfirst and the first line with "artists".