According to an article from The Atlantic Wire, which in turn gathered information from Associated Press' Nick Perry, the animal wranglers on the set of The Hobbit claimed that 27 animals had died in the "death trap" of a farm where the animals were held. What. 

According to Perry, the Animal Human Association will "still give the film the 'No animals were harmed during the actual filming' tag, because the organization only monitors set conditions, not the off-site farm where they were being held." What: 

A spokesman for trilogy director Peter Jackson on Monday acknowledged that horses, goats, chickens and one sheep died at the farm near Wellington where about 150 animals were housed for the movies, but he said some of the deaths were from natural causes...One wrangler said that over time he buried three horses, as well as about six goats, six sheep and a dozen chickens.

Even Rainbow, a miniature pony, was hurt. WHAT: 

[from Wrangler Chris Langridge] When I arrived at work in the morning, the pony was still alive but his back was broken. He'd come off a bank at speed and crash-landed ... He was in a bad state.

Also according to the Atlantic Wire, when Perry's story went public, the producers for The Hobbit quickly tried to distance themselves from these tragedies. WHAT: 

The producers completely reject the accusations that twenty seven animals died due to mistreatment during the making of the films...The American Humane Association (AHA) was on hand to monitor all use of animals by the production. No animals died or were harmed on set during filming.

It's damn sad. I don't even...WHAAAT? 

[AP, via The Atlantic Wire]