James Cameron's Digital Domain Seeks Bankruptcy Protection
One of the film industry’s premiere visual effects firms, Digital Domain Media Group, announced that it has voluntarily filed for Chapter 11 bankruptcy protection.
Most famous for providing the stunning visuals of 1997‘s award-winning film, Titanic, the company co-founded by James Cameron is now struggling financially, listing a total of $214 million in debt and $205 million in assets. The Company is also responsible for digital visuals in Pirates of the Caribbean, Transformers, and Tron: Legacy.
In Chapter 11 business filings, day-to-day operations continue as usual while the restructuring plan is being worked out. In the case of Digital Domain, high-level creditors to the firm have agreed to finance $20 million to pay employee wages and other expenses to keep the company going.
A bankruptcy auction will take place on September 21, 2012, to allow others to place bids on the Company’s operating arms in the U.S. and Canada. Digital Domain has come to a bankruptcy sale agreement with private equity firm Searchlight Capital Partners to the tune of $15 million; bidders at the upcoming auction will have to beat this price. All sales are subject to approval of the bankruptcy court.
"We are excited to begin this new chapter in our history and look forward to partnering with Searchlight,'' said chief executive of Digital Domain Productions, Ed Ulbrich, according to the Los Angeles Times. "The capital commitment of Searchlight will enable us to continue to bring our expertise to feature films, advertising, games, and other media experiences, with a focus on what we do best—creating amazing digital productions."
Digital Domain’s bankruptcy comes with a recent string of Chapter 11 filings among other production and news media companies such as Inferno International LLC and Journal Register Company, a subsidiary of Digital First Media. With a decline in print media and more competition among digital enterprises, many of these companies turn to Chapter 11 to restructure debts, avoid having to liquidate all assets, and continue to operate in hopes of coming out of bankruptcy in better shape.