UPDATE, 1:38 PM: Rhythm & Hues confirms Deadline’s original reporting that it will be filing for Chapter 11 tonight. Here’s the statement just released by President of Film Division Lee Berger:

Rhythm & Hues Bankruptcy“Tonight R&H is filing for Chapter 11 reorganization in the U.S. Bankruptcy Court and hope to be in front of a Bankruptcy judge in the next couple days. In the meantime, all of our offices remain open, our clients are aware of the process; we have obtained commitments for financing to complete projects in house at the quality level the studios have come to expect. Following the filing, R+H will be seeking to secure financing for future growth. I believe that we are going to come out of this situation stronger, more efficient, and as prolific as we are now.”

PREVIOUSLY, SUNDAY PM: Oscar-nominated, VES-winning and Annie Award-winning animation studio Rhythm & Hues will be formally filing for bankruptcy Monday morning, Deadline has learned. Within hours of winning the BAFTA for Special Visual Effects for Life Of Pi, the financially troubled company informed employees around 9 PM Sunday of the upcoming Chapter 11 filing, insiders say. Many Rhythm & Hues employees were also told by management not to show up to work Monday. On Friday, the company, headquartered in El Segundo, preceded its bankruptcy filing news by announcing to workers that paychecks would be delayed indefinitely.

While the paperwork has not been formally filed, it does seem like Rhythm & Hues is at least partially shuttering. Sources tell Deadline that production on contracted work for Warner Bros’ Seventh Son, Fox’s Percy Jackson 2, and Universal’s R.I.P.D. has been halted, while work on Warner Bros’ 300: Battle of Artemesia may have also been affected. The three studios attempted to keep Rhythm & Hues alive with a joint $21 million infusion before VFX company Prime Focus stepped in as a potential buyer. That deal is now uncertain.

The veteran VFX house (Babe, The Golden Compass) is nominated for the Academy Award for Best Achievement in Visual Effects for its work on Life Of Pi and Snow White And The Huntsman. On Tuesday, Rhythm & Hues nabbed four top prizes at the 11th annual VES Awards for Life Of Pi, where director Ang Lee accepted the VES Visionary award by paying tribute to his VFX team.