On Tuesday, Digital Domain announced that it had defaulted on $35 million in debt, and accrued interest and other amounts worth an additional $16 million. According to the Wall Street Journal, “The company said Wednesday that six holders of the defaulted debt had agreed to a forbearance while the company seeks additional debt financing or another source of liquidity.
Today, Digital Domain Media Group (DDMG) announced that they have shut down their Florida studio, appointed Ed Ulbrich CEO, and confirmed that John Textor has resigned from all of his positions at DDMG.
We’re pleased to see that DDMG’s studios in California and Vancouver “intend to continue to operate without interruption.”
Here’s the full press release from the company:
Digital Domain Media Group Initiates Strategic Realignment
Company Begins Cessation of Florida Studio Operations
PORT ST. LUCIE, Fla. — September 7, 2012 — Digital Domain Media Group, Inc. (NYSE: DDMG) today announced that it has initiated a strategic realignment that will enable it to focus its resources on its core business, Digital Domain Productions, Inc., a company focused on creating digital visual effects, CG animation and digital production for the entertainment and advertising industries. As a key part of this strategic realignment, DDMG has begun the cessation of its Port St. Lucie operations by reducing virtually its entire Port St. Lucie workforce, retaining approximately 20 employees who will remain as part of the wind-down.
DDMG’s studios in California and Vancouver intend to continue to operate without interruption, as will the Digital Domain Institute, based in West Palm Beach, Florida. Long-time Digital Domain executive Ed Ulbrich has been promoted to Chief Executive Officer of Digital Domain Productions.
Digital Domain Productions is working closely with its clients, vendors and other critical constituencies throughout this process.
DDMG is implementing this important operational change and will continue to evaluate various restructuring alternatives, as previously disclosed, as part of its effort to reduce its overhead and restructure its long-term debt.
As previously announced, DDMG is continuing to work with the holders of its senior secured convertible notes, each of whom has agreed to forbear temporarily from exercising its remedies under such senior notes until such time as it elects to withdraw such forbearance on not less than 48 hours’ advance notice to DDMG. An inability by DDMG to quickly access additional sources of liquidity to fund its current operating cash needs would materially adversely affect its financial condition and would require it to seek relief or protection from its creditors.
John C. Textor has resigned, effective immediately, from his positions as Chief Executive Officer and Chairman of the Board of Directors of DDMG, as a member of the Board of Directors of DDMG, and from all positions as an officer and director with all subsidiaries of DDMG.