UPDATE, 8:28 PM: Rhythm & Hues just confirmed Deadline’s report in a press release. The VFX studio says it expects a “competitive auction” on March 27, which will be decided in court on March 28. But don’t count JS Communications out yet: I’m told they’re still exploring their options and may still throw their hat into the ring. “I looked at the company and due to the nature of this business, one missing component was cooperation from the studios because the work comes from them”, JS Communications’ David Shim told Deadline, adding that he’s “still working to have a dialogue with the studios”.

PREVIOUS EXCLUSIVE, 6:57 PM: JS Communications was approved earlier this month as a stalking horse bidder in the ongoing Rhythm & Hues bankruptcy case, which would have guaranteed a minimum bid in the VFX shop’s upcoming auction. But the South Korean media company confirmed to Deadline that it failed to submit a firm purchase agreement for Rhythm & Hues’ assets by today as mandated by the court. JS Communications’ Shim explained the move to Deadline in an email: “In part due to the difficulties in securing cooperation and support from the Studios as of today, we will not be submitting the Asset Purchase Agreement today… It is very regrettable that we had to come to this decision at this point (barring any favorable changes)”. Sources close to the situation tell me other unnamed potential buyers are circling; bids must be submitted by Friday ahead of the March 27 auction.

Related: Potential Rhythm & Hues Buyer Gets Stalking Horse Approval
Related: Rhythm & Hues Hoping For Quick Sale
Related: Rhythm & Hues Has 200 Job Openings – In Taiwan: Report