Digital Domain gets interim approval for fast Chapter 11 sale
WILMINGTON, Delaware (Reuters) - A bankruptcy judge approved on Wednesday a snap auction of Hollywood special-effects company Digital Domain Media Group Inc, but said he may reconsider what he called an "unprecedented" schedule setting up next week's sale.
The company that won an Academy Award for its work on "Titanic" filed for bankruptcy on Tuesday with only $50,000 in the bank and unable to meet Friday's payroll, its attorney, Robert Feinstein, told the U.S. Bankruptcy Court in Delaware.
Digital Domain Chief Executive Ed Ulbrich told the court that Hollywood studios would begin pulling work from the company on Thursday unless it had an emergency loan and an agreement to auction the company to a better-financed owner on September 21.
After seven hours of nonstop arguments Judge Brendan Shannon called the case "deeply troubling" and said he was being asked to "call a bluff" on threats the company would be forced to close its doors without a quick sale.
While approving a loan to keep the company afloat and the proposed auction date, he also set a September 20 hearing to reconsider his decision.
Hours earlier he had said he would not allow the rushed sale, but relented after hearing evidence from an executive from Marvel Entertainment who said his studio would not support the company if its future was still uncertain beyond next week.
Digital Domain has created effects for more than 90 major films including "Pirates of the Caribbean: At World's End."
The company specializes in creating realistic computer-generated human characters, and had said in June it planned to produce virtual Elvis Presley likenesses across various platforms, including live shows, TV and online.
It also created the hologram of the late Tupac Shukar, which performed at the Coachella Music Festival earlier this year.
Private equity firm Searchlight Capital has proposed kicking off the auction with an initial bid of $15 million for most of the company.
Ulbrich testified that he has talked to eight or 10 buyers in recent days and the company's chief restructuring officer, Michael Katzenstein, told the court 20 parties had signed confidentiality agreements.
Reuters on Tuesday reported that Prime Focus World, which created the special effects for the blockbuster "Avatar," was contemplating a bid, according to a person with knowledge of its interest.
Most of Wednesday's hearing was focused on the need to save the company with the quick sale, which Shannon said was faster than any he had ever seen. Digital Domain's legal team said the schedule was driven by the need to keep potential blockbusters on carefully planned release dates.
"The studios are freaking out," Feinstein, the company's attorney, told the court.
WASHINGTON - The Federal Reserve on Wednesday reaffirmed it was in no rush to raise interest rates, even as it upgraded its assessment of the U.S. economy and expressed some comfort that inflation was moving up toward its target.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.