Digital Domain Media may consider bankruptcy protection

Fri Sep 7, 2012 2:49pm EDT

(Reuters) - Shares of Digital Domain Media Group Inc DDMG.N fell as much as 45 percent after the company, which makes digital special effects for TV and films, said it may consider bankruptcy protection as it looks to pay down debt.

The company's shares fell to 54 cents, their lowest level since their debut on the New York Stock Exchange in November at $8.50 apiece.

The Academy Award-winning company, which created special effects for movies such as "Titanic" and "Transformers," defaulted in paying interest on $35 million senior notes on Wednesday.

Digital Domain also said Chief Executive John Textor has resigned. The company said it was weighing options on appointing a new CEO.

Textor said in a regulatory filing on August 29 that he planned to take the company private, but did not give details. Textor owns a 23 percent stake in the company.

The company named Ed Ulbrich as CEO of Digital Domain Productions Inc, its core business.

Digital Domain said on Friday it closed its Port St. Lucie, Florida operations and fired most of the employees at the facility. It will still operate its studios in California and Vancouver.

The company, which specializes in creating realistic computer-generated humans, said in June it was planning multiple virtual Elvis Presley likenesses across various platforms, including live shows, TV and online.

Digital Domain started looking for strategic alternatives last month and has hired Wells Fargo Securities LLC as financial adviser.

(Reporting by Aditya Kondalamahanty and Sruthi Ramakrishnan in Bangalore; Editing by Maju Samuel)

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Comments (1)
LogicLover wrote:
You know things are bad when a company like that goes down…. A lot of companies are competing with other overseas companies and the price of the work just can’t go down. People have to make a living.

Sep 11, 2012 4:42pm EDT  --  Report as abuse
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