Any of our San Diego area readers who are movie buffs may remember the hits "Titanic" and "Transformers." While one was a critically acclaimed Oscar winner and the other was a summer-fun popcorn fest, both had one thing in common: their special effects were fantastic. The company behind some of those effects, Digital Domain, was founded in 1993 in partnership with legendary director James Cameron. However, the company was facing some tough times in recent years, to the point where a Chapter 11 bankruptcy filing became necessary. Fortunately though, the company recently emerged from the Chapter 11 process with new owners, and is now ready to continue to bring all of us more spectacular movies.
Digital Domain has offices in California and Canada, employing over 700 people. The new owners come from a partnership between Chinese and Indian companies, who put together a bid of $30.2 million for the company.
When a company files for Chapter 11 bankruptcy protection, the goal is usually to submit a plan to reorganize the company's structure, reach an agreement with creditors on repaying debt and then to emerge as a more profitable, successful enterprise. This is all done while the company remains in business.
However, selling to new owners to continue a business in operation is one possible outcome of a Chapter 11 bankruptcy as well. If a new owner is what it takes to reshape a company, it can sometimes be the best option. There is no doubt that the bankruptcy process can be quite tricky, with numerous different possibilities in play. Going into the process with the best advice and information, however, is usually the best predictor of success.
Source: Los Angeles Times, "Digital Domain emerges from bankruptcy," Richard Verrier, Sept. 28, 2012