Digital Domain Media Group, multi-Academy Award-winning digital production company has filed for bankruptcy protection and agreed to sell its core business to Searchlight Capital Partners for $15 million.
The company, founded by Titanic director James Cameron, has filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code, Digital Domain said in a late night statement on Tuesday.
The petition has been filed in the US Bankruptcy Court for the District of Delaware in Wilmington, it added.
It further said that the company has entered into a purchase agreement with Searchlight Capital Partners for the acquisition of Digital Domain Productions and its operating subsidiaries in the US and Canada, including Mothership Media, subject to regulatory approvals.
In July last year, India's Anil Ambani-led Reliance MediaWorks had partnered with Los Angeles-based Digital Domain Productions for visual effects and 3D Stereo Production services studios in Mumbai and London.
The production company was behind innovative visuals in more than 80 major motion pictures, including Pirates of the Caribbean: At World's End and the Transformers series and hundreds of commercials, the statement said.
The company went public just 10 months ago, but in recent times shares have tumbled to as low as 44 cents.
"DDMG has been working diligently to reduce costs for the benefit of stakeholders and has already implemented various strategic realignment initiatives that we believe will have a positive impact on the robust and flourishing going concerns," chief restructuring officer Michael Katzenstein said.
"In tandem with Senior Noteholders and other parties, it was determined that the use of these proceedings provides the most viable opportunity for creditor recovery while also ensuring identification of buyers who recognise the true value of these assets," Katzenstein added.
As of June 30, 2012, the company had total balance sheet assets of about $205 million, as against liabilities of $214 million.
On September 7, 2012, the company had announced the initiation of its strategic realignment that will allow it to focus on its core business.
As part of this process, DDMG began the cessation of its Port St Lucie, Florida operations by reducing virtually its entire Port St Lucie workforce by about 300 employees and retaining around 20 employees.
In addition, John C Textor resigned effective September 6, 2012 from his positions as chief executive officer and chairman of the board of directors of DDMG and from all other positions as officer and director of DDMG's subsidiaries.
"We remain on track to deliver all of our clients' productions on schedule, on budget and at the highest degree of quality that they expect from Digital Domain," the company's chief executive officer Ed Ulbrich said.
Image: A scene from Titanic | Photograph: Rediff Archives
