Rex was originally intended for theatrical release. But the movie tested poorly with older test audiences. So the studio released it straight-to-video in the US, where it could make more money in the lucrative kids' video market. Since the movie was completed on it's original theatrical studio budget, Rex became the most expensive straight-to-video film ever at the time of its release. It was, however, shown theatrically in many countries around the world including Germany, Spain, France, Japan, Portugal, UK and South Africa.
Whoopi Goldberg made a verbal agreement to star in the film in 1993. When she tried to back out, producer Richard Gilbert Abramson sued her for $20 million. The suit was settled very quickly, when Goldberg agreed to star for $7 million, $2 million more than the original agreement.