The beleaguered Oscar-winning Los Angeles-based VFX house has caught the eye of South Korean entertainment and media company JS Communications.

The Asian suitor has reportedly signed a letter of intent to acquire the effects company behind the Oscar-winning Life Of Pi.

Rhythm & Hues filed for Chapter 11 bankruptcy in February and laid off 250 of its approximately 1,400 employees last month.

A bankruptcy judge has approved approximately $16m in loans from Fox, with whom Rhythm & Hues collaborated on Life Of Pi, and Universal.

The lifeline has enabled Rhythm & Hues to remain operational while it completes work on upcoming releases R.I.P.D. and the Percy Jackson sequel. It is also working on the Warner Bros titles 300: Rise Of An Empire and Black Sky.

Rhythm & Hues’ circumstances are symptomatic of a crisis that threatens to engulf the North American-based effects industry, weakened by the lure of cheaper services overseas, a highly competitive bidding environment and generally low profit margins.

The Orphanage and Asylum are examples of two effects houses that closed down in the last few years.

Separately, professionals have begun lobbying for greater remuneration for their work. A recent edition of the KCRW public radio show The Business highlighted the plight of effects experts and noted they were not cut in on lucrative back-end deals favoured by directors, producers and stars.