Digital Domain Files For Bankruptcy Protection But With Sales Agreement

Private investment firm Searchlight Capital Partners has agreed to pay $15M for Digital Domain Productions — the key operation at Digital Domain Media Group — although the special effects company will have to put itself up for auction following its Chapter 11 bankruptcy filing. Creditors threatened last month to foreclose; Digital Domain’s been losing cash which put it in default of its loan agreements. But Hudson Bay Master Fund and other senior note holders like the deal with Searchlight: They’re putting up as much as $20M in debtor-in-possession financing. Chief Restructuring Officer Michael Katzenstein says that Digital Domain is “grateful for the cooperative assistance of our lenders, our customers and employees as we work to seamlessly transition these important businesses and other assets to financially strong and committed buyers. Their ongoing support ensures the success of these matters.” CEO Ed Ulbrich adds that the company is “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.” Films in its pipeline include Lionsgate’s Ender’s Game (Digital Domain is a co-producer), New Line’s Jack The Giant Killer, and Paramount’s G.I. Joe: Retaliation. (more…)

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