Digital Domain Inc., the special effects company founded by director James Cameron filed for Chapter 11 bankruptcy protection Monday.
Digital Domain has offices in Canada and California and is responsible for digital visual effects, animation and for at least 90 films including Cameron’s classic “Titanic.” The company is also responsible for the holograph of deceased rapper Tupac.
In their filing with a Delaware bankruptcy court, the company listed their assets at $205 million with their liabilities totaling $214 million. Digital Domain defaulted on several loans but reached an agreement to sell their main production unit to Search Light Capital Partners for $15 million.
The filing came shortly after the company announced that it would be letting go 280 employees and closing their Port St. Lucie, Florida studio which was built with millions of dollars in incentives from the state and city. After news of the filing, the Associated Press reported that Florida Governor Rick Scott ordered a probe into the incentives.
One of the Digital Domain’s primary shareholders and Chief Executive John Textor resigned upon hearing of the bankruptcy. In Textor’s resignation letter, he condemned the company for defaulting on their loans and firing the employees at the Florida studio.
The company will continue day to day production. Some of the debt holders agreed to provide $20 million in financing while they restructure.
This is the second bankruptcy for a production company over the past month; Inferno Films, which produced Brad Pitt’s latest film, also sought structured debt relief.
Bankruptcy attorneys can make it possible for a financially troubled company to eliminate or reduce some of their debts and help them become a profitable business once again.
