Digital Domain Media filed for Chapter 11 in Florida and Canada, listing total debts of $214.9 million and total assets of $205.0 million. Meanwhile, Searchlight Capital Partners has purchased DD’s Oscar-winning VFX company for $15 million — temporarily saving jobs, salaries, and benefits in Venice, San Francisco, and Vancouver, reports Daily Variety.
Yet Digital Domain Institute has suspended its certification classes indefinitely in West Palm Beach, leaving students in a precarious position.
However, Reuters reports that a one-day auction is planned on Sept. 21 to solicit competing bids, as required by the bankruptcy code. Florida state and local officials committed $135 million to subsidize the construction of a state-of-the-art studio in Port St. Lucie, which the company closed last week.
The Florida Department of Economic Opportunity demanded on Tuesday the immediate repayment of $20 million of state funds the company had received and was exploring its legal options to recover the funds.
Enterprise Florida, a public-private partnership that was involved in negotiating the incentives for Digital Domain but later recommended against providing support, said it was looking at clawback provisions.
Digital Domain, like other industry players, is struggling with low margins as movie studios can pick from a range of vendors around the world to produce computer-generated images. Digital Domain raised $42 million in an initial public offering in November but said last month that it was looking at strategic alternatives and had hired Wells Fargo Securities LLC as financial adviser.
Digital Domain said it needed to finalize the sale quickly, through the one-day auction, or Hollywood studios would cancel work from the firm.
Yet a bankruptcy attorney said a 10-day sale schedule was “incredibly short” and may make it difficult to find bidders as well as leave creditors little time to review the process.
At the same time, The Chicago Tribune reports that Prime Focus World has put in a bid for Digital Domain Media.