‘Titanic’ Effects Maker Plunges as Bankruptcy Considered
Digital Domain Media Group Inc. (DDMG), creator of special effects in the “Transformers” films and James Cameron’s “Titanic,” plunged to a record low after it began a restructuring that may prompt a bankruptcy filing.
Digital Domain fell 39 percent to 60 cents at the close in New York, for the biggest decline and lowest price since an initial public offering last year. The stock traded at a high of $9.20 in May.
John Textor, chairman and chief executive officer, resigned. Ed Ulbrich, a longtime executive, will lead the core business. The company, co-founded by Cameron and part owned by football star Dan Marino as of last year, needs to restructure its debt and cut overhead, according to a statement today. The company went public last November, selling 4.92 million shares at $8.50 each in an offering led by Roth Capital Partners Inc.
Digital Domain said it eliminated almost all staff in Port St. Lucie, Florida, where it’s based, and that studios in California and Vancouver will continue to operate. The company is working on “Ender’s Game,” a Lions Gate Entertainment Corp. (LGF) film that began shooting in February, according to an August regulatory filing.
Post-production work on “Ender’s Game” remains on schedule, Peter Wilkes, a spokesman for Lions Gate, said in an interview. “We’re very excited about ‘Ender’s Game’ and we’re very confident we will release it as planned on Nov. 1, 2013.”
Inability to access financing quickly “would materially adversely affect'' Digital Domain's financial condition and would require it to seek ``relief or protection from creditors,'' according to the statement.
Digital Domain said in a later statement that the board of directors and interim chief operating officer “are making decisions on behalf of the company” while it weighs its “options with regard to appointing a new chairman and CEO.” Michael Katzenstein is the interim COO, according to a filing.
The company listed total long-term liabilities of $141.7 million as of the second quarter, according to data compiled by Bloomberg.
Digital Domain Media Group started in 1993 and has worked on more than 80 major motion pictures. It also was responsible for creating a hologram of slain rapper Tupac Shakur for a performance at the Coachella music festival earlier this year.
Marino, the former Miami Dolphins quarterback, owned a 3.6 percent stake in the company as of November 2011, according to data compiled by Bloomberg.