PORT ST. LUCIE, Fla. - The digital production company founded by director James Cameron said Tuesday that it filed for Chapter 11 bankruptcy protection and reached a deal to sell its operating business to a private investment firm for $15 million.
Digital Domain Media Group Inc., best known for its work on Cameron's "Titanic," filed in the U.S. Bankruptcy Court for the District of Delaware, along with a Canadian court.
The sale agreement with Searchlight Capital Partners LP includes the company's operating subsidiaries in the U.S. and Canada. It remains subject to an auction process where the company can consider other higher offers and must be approved by the court.
The Port St. Lucie, Fla., company's Digital Domain Productions business has studios in California and Canada that create digital visual effects, animation and digital production for the entertainment and advertising industries.
Apart from its work on "Titanic," Digital Domain had produced visual effects for more than 90 movies, including "Pirates of the Caribbean: At World's End" and the "Transformers" series.
The filing comes days after Digital Domain said it was closing its Florida facility, laying off about 280 workers. The company's CEO John Textor resigned, protesting the decision. Textor is also the company's second-largest stockholder, owning about 23 percent of shares outstanding. Digital Domain's largest shareholder is Florida private equity firm Palm Beach Capital Partners, which owns 38 percent of the company.
Digital Domain had spent the past few years building a new animation studio in Port St. Lucie, using millions in incentives from the city and the state. The company went into default on a series of loans.
Day-to-day operations of Digital Domain's remaining business won't be affected by the Chapter 11 filing, the company said. Debt holders have agreed to provide up to $20 million in financing that will fund its activities while it restructures.
As of June 30, the company, which went public in November, had total assets of about $205 million and total liabilities of about $214 million.