After defaulting on a $35 million loan and to avoid bankruptcy, Digital Domain Media Group has initiated a strategic realignment to protect its core VFX and CG animation business. The beleaguered John Textor is out as CEO and chairman of DDMG; and long-time Digital Domain exec Ed Ulbrich has been promoted to CEO of Digital Domain Prods.
As a key part of this strategic realignment, DDMG has begun the cessation of its Port St. Lucie operations by reducing virtually its entire Port St. Lucie workforce, retaining approximately 20 employees who will remain as part of the wind-down. Textor has resigned, effective immediately, from all positions, including chairman of the board and director of all subsidiaries of DDMG.
DDMGs studios in California and Vancouver intend to continue to operate without interruption under the direction of Ulbrich, as will the Digital Domain Institute, based in West Palm Beach, Florida.
Digital Domain Prods. is working closely with its clients, vendors, and other critical constituencies throughout this process. DDMG is implementing this important operational change and will continue to evaluate various restructuring alternatives, as previously disclosed, as part of its effort to reduce its overhead and restructure its long-term debt.
As previously announced, DDMG is continuing to work with the holders of its senior secured convertible notes, each of whom has agreed to forbear temporarily from exercising its remedies under such senior notes until such time as it elects to withdraw such forbearance on not less than 48 hours advance notice to DDMG. An inability by DDMG to quickly access additional sources of liquidity to fund its current operating cash needs would materially adversely affect its financial condition and would require it to seek relief or protection from its creditors.