Rainbow Production Services, LLC Bankruptcy Case

The Chapter 11 cases of Rainbow Production Services, LLC and three affiliates were dismissed in late June 2025, roughly seven months after filing, having concluded in a section 363 sale that transferred the debtors' film-completion-guarantee and post-production businesses to a going-concern purchaser rather than through a negotiated plan.

The four debtors — Film Finances, Inc., Rainbow Production Services, LLC, Rainbow Digital Services, LLC, and EPS-Cineworks, Inc. — filed voluntary petitions in the District of Delaware on November 4, 2024. The filing was precipitated not by failure in the debtors' core businesses — a 74-year franchise in completion bonds spanning thousands of films — but by the collapse of their ultimate parent, 777 Partners, whose leveraged acquisition spree, including an aborted bid for Everton Football Club, ended in a UK bankruptcy order and allegations that 777 had double-pledged collateral across multiple lenders. With the pre-petition senior loan facility in default since its August 31, 2024 maturity and liquidity exhausted, the debtors entered Chapter 11 to stabilize operations and run a sale process, as detailed in the first-day declaration of CEO Peter ColemanDkt. 4 filed with the voluntary petitionDkt. 1.

Relief moved quickly. The debtors sought post-petition financing and cash collateral authorityDkt. 12 on November 5, 2024, and the court entered an interim order two days laterDkt. 54 authorizing DIP financing, use of cash collateral, adequate protection, and priming liens while scheduling a final hearing. The DIP structure contemplated a roll-up of pre-petition obligations, and the lender group was effectively continuous with the existing secured base: the roughly $68.5 million Film Finances Senior Loan Facility, secured by substantially all debtor assets, was held by parties affiliated with the DIP providers, tying the case's liquidity to its incumbent secured creditors.

The court approved Rainbow Production Services’ sale of all or substantially all assets to Film Services International, LLC, the stalking-horse bidder, under the asset sale order. The order authorizes a free-and-clear transfer other than assumed liabilities, approves assumption and assignment of selected executory contracts and unexpired leases, and makes FSI responsible for applicable cure amounts.

The consideration is economically important: FSI’s bid includes a credit bid of DIP obligations and a portion of prepetition indebtedness, with $22 million of DIP and specified prepetition debt deemed satisfied at closing. The court also found FSI was a good-faith purchaser under section 363(m), waived the 14-day stay under Rules 6004(h) and 6006(d), and made the order immediately effective. That moves the case from sale process risk to closing and post-sale estate administration, while shifting creditor focus to proceeds, remaining claims, and any wind-down path.

Rainbow Production Services, LLC

Rainbow Production Services, LLC

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Court approves all-asset sale to Film Services International

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