“I loved being there. Even when hours got long and we were working weekends, I truly loved being there… We’d all hang out after work, and get lunch together. It was the most amazing camaraderie I’ve ever experienced. Because we were so close, we pushed each other to work hard, helped each other when we were stuck, and looked out for each other. That was what Rhythm was, to me. My family.”

The speaker, who asked to remain anonymous, was a former Rhythm and Hues employee, who logged time on projects like Hop, Mr. Popper’s Penguins, and more recently, Snow White and the Huntsman. He left before the recent spectacular Oscar-season implosion. “The pipeline was so optimized that rigging was done quickly, and there just wasn’t the need for many riggers… plus the riggers already there were insanely talented. It was one of the hardest decisions I’ve ever had to make, and not a day goes by when I don’t miss my Rhythm family.”

Sadly, of course, many will be missing that family now. And if we’re to extend that particular metaphor, how was it that, of all the nice families on the block, this one wound up watching their house burn down? Or perhaps – considering the news that the company is being sued in bankruptcy court for unpaid wages and benefits by at least one employee, on behalf of many others – how was it this nice family is suddenly going through such a bitter divorce?

Such is the shock still being generated that many are still choosing their words very carefully, wondering where and how the fallout will settle, hoping the wounds can somehow be stanched. “My heart goes out to the artists and the management of that company,” said, the chair of the, the DP of– whose Oscar nomination is arguably the direct result of his and director’s collaboration on the visual effects for the film – told us: “The people at Rhythm and Hues are so talented and should not be facing this. I am hoping for a rescue ship.”

It’s another apt metaphor, considering Life of Pi’s particular storyline, and there may be something of a rescue ship on the horizon, with the news emerging from bankruptcy court that a handful of production houses will be allowed to loan the VFX facility money, for the very practical reason that they need VFX finished on their upcoming tentpole films. The deep-pocketed “uncles” in this case include both Universal and Fox, neither of whom, it is reported, has an actual interest in owning a stake in the company.

Will such a strategy work?is a Vancouver-based VFX honcho, who’d logged time in supervisory roles atand. His credits includeand, among others. He understands why studios might be wary, citing a brief history of the modern VFX industry, with its rebirth due to(and the creation of), and the early houses created in ILM’s wake – each of which is no longer with us –, etc. Indeed, Hoffman recounts that Dreamquest was bought by, who thought they wanted an in-house VFX unit, renamed it, and then, of course, shuttered the unit.

So how to give studios “some skin in the game?” Hoffman wonders, since they continue to seek “services at reduced prices.” The only fair thing might be to give the post houses a way to share the benefits of all of these tentpoles.

Of course, Rhythm and Hues managed to do that too. In fact, one of its bankruptcy “uncles” is a production house overseeing a Middle Ages-set film that R&H has an equity stake in – and that still wasn’t enough to stay solvent.

Karma, it seems, wasn’t enough for “one of the finest visual effects shops in the world” as described by Mark Dornfeld, the founder of Custom Film Effects, who even credits R&H as being smart enough to read the tea leaves about outsourcing to cheaper markets. The company was “one of the first to chase after those overseas film credits,” he noted, with outposts in India and Vancouver, for example. And even that didn’t work. “What does that tell you?” he asked.

What it tells him is that the studios impose a kind of Wal-Mart position on the postproduction landscape, announcing that “we’re only going to pay $0.15 a unit for socks,” leaving all the sock makers running scared, and driving the prices down.

Other industries have seen this, and according to Dornfeld, it’s even worse in visual effects because “we’re not making a tangible product. When you get out there, and the director starts noodling with the shot,” well, your manufacturing chain for that ostensible pair of socks suddenly has a few more non-budgeted links in it. Somebody has to eat the costs of the noodling. And that somebody isn’t the studios.

Nor is it even the biggest of the post houses. Dornfeld, who oversees a smaller and presumably leaner, shop than R&H, calls 2012, “the worst year I’ve had in the business.”

Is there a particular genie that needs to be rebottled to turn those bad years into very good years? Okun harkens back to that first Star Wars era, saying, “if I had a magic wand, I would go back 30 years and prevent all this from happening. It would have been easily accomplished back then when the industry was centralized and we had not yet revealed our secrets.”

But with what Hoffman calls a “gypsy workforce” becoming the norm in visual effects, would it ever have been possible to keep those secrets in L.A.? Or were forces larger than the film biz at work, forcing globalism on an industry that was once based in Hollywood?

After the secrets have been revealed, what needs to change? According to Dornfeld, it’s the “subsidies or payola” offered by other countries. “The technical term is tax credit,” he said, but the result is our government announcing trade deals, which mostly benefit multinational corporations – the very ones who now own all the studios as entertainment divisions. “We’ve got these trade deals,” he said, “and you guys are taking it up the ass.”

On the trade deal front,, founder and visual FX producer at, explained that “it’s not a level playing field. Subsidies are what’s hurting us most at this point.” She added that if that playing field isn’t leveled out, “it’s hard to know what will happen.”

All of which introduces an extra degree of irony, since so many of the spectacular studio movies are predicated on breathtaking visual effects.

Hence, Disney buying Marvel Comics, and then Lucasfilm, along with Industrial Light & Magic. And hence, all of Warner Bros. plans with its DC Comics properties. In other words, most of the box office prognostication stretching into near mid-century depends on the availability and affordability of visual effects.

“It goes back to supply,” said Fulle. “If we’re willing to undercut each other…” She left the thought, and the sentence, dangling. She also noted that it’s government – whether in Canada, London, India or wherever – that gives the incentives “back to the production companies,” rather than the VFX wranglers so, “how do you combat that?”

If you’re shopping for toothpaste, she noted, and one chain consistently sells what is basically the same toothpaste for less, you’ll buy it there. And perhaps it’s telling that we can’t have a conversation about visual effects in the modern marketplace without comparing it to socks or toothpaste.

“The benefactors,” as Hoffman noted, “are the studios.”

And yet, when Ang Lee won his visionary statue at the recent VES Awards, he thanked Rhythm and Hues – not the studios – for helping him “make art.” Granted, it was the Visual Effects Society’s evening, but who will be there to help make art, if everyone in the current post business is running scared?

Another R&H employee that we spoke with – who also wished to remain anonymous, as he was there to the bitter end, and now finds himself job hunting – posed the same question.

Speaking of employees in some of R&H’s outsourced shops, said employee – let’s call them “SE” – described them as “more technically trained and less creative,” than the ones working back at the mothership. “We’d have to clean up their work,” he said.

SE had also taken “a pay cut, a demotion and a longer drive because I wanted to work for this company so badly.” And when SE got there, in order to work on the production side of several recent projects, he found a company that was really “trying to take care of its own employees,” along with the concurrent realization that “we’re probably not going to have jobs in April.”

This despite the fact that R&H seemed “like one of the few companies in any industry whose CEO let everyone know what was going on.” And then came that fateful Friday meeting, when company founder and president John Hughes, known for being so transparent, “wouldn’t say anything,” at least not of substance. And this after unusual weeks of silence about what was going on in the company.

The silence may or may not have been of Hughes’ own choosing, but it created a suspenseful Sunday evening, as people found they were laid off via a series of phone calls. And since VFX people are “social media savvy,” as SE put it, Twitter, Facebook and the Internet in general, lit up with the question, “have you been fired yet?”

The answer, of course, was finally “yes.”

“NASA used to joke they wished they had kind of computing power the visual effects industry has,” SE observed. “I don’t know why the studios don’t want to pay for that.”

Hoffman, who noted his “hat’s off to Rhythm and Hues for having done it for so many years,” waxes a bit more optimistic. “It won’t be the same Rhythm and Hues, but a form of it will emerge, restructured after bankruptcy. It will be figured out, and get done.”

Perhaps. Though heartbreak remains the order of the day. Oscar-nominated Bill Westenhofer told us, “I’d rather not comment on R&H at this time.” When we then mentioned the likelihood of seeing him in the winner’s circle come Academy time for his work on Life of Pi, he added, “See you next weekend, with luck.”

Are there any two consecutive sentences that better sum up the contradictions rife in the visual effects industry at the present moment, than those?