(Reuters) - Bankrupt Hollywood special-effects company Digital Domain Media Group Inc said its lenders have agreed to provide about $11.8 million of debtor-in-possession financing, which would help the company continue operating while it reorganizes.
A bankruptcy judge approved a snap auction of the company on Wednesday, 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.
Private equity firm Searchlight Capital, which has agreed to buy most of Digital Domain, reaffirmed its decision, the company said in a statement. Searchlight had earlier proposed kicking off the auction with an initial bid of $15 million.
“Combined with our cash from ongoing operations, this funding supports Digital Media in paying normal operating expenses, such as employee wages and benefits, payments to vendors and suppliers, and other obligations,” said Michael Katzenstein, chief restructuring officer.
Reporting by Sunayan Bhattacharjee in Bangalore; Editing by Matt Driskill