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Digital Domain files for bankruptcy

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May 6, 2008
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Shame the studio did lots of good work.

Also this is why one works for ILM, I think Lucas would have to die before anyone could get it shut down and even then it would have to be bleeding cash out.
 

XiaNaphryz

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Nov 5, 2005
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Some more coverage:

Judge skeptical of quick sale of special-effects firm

* Judge suggests delaying Digital Domain auction
* "Titanic" effects firm filed for bankruptcy Tuesday
* "Studios are freaking out" -lawyer

By Tom Hals

WILMINGTON, Del., Sept 12 (Reuters) - The speed of the proposed bankruptcy sale of the Oscar-winning special-effects company Digital Domain Media Group Inc is "unprecedented," a judge said on Wednesday, and suggested delaying an auction planned for next week.

The company 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.


Digital Domain won an Academy Award for its work on "Titanic" and has created effects for more than 90 major films including "Pirates of the Caribbean: At World's End."

Feinstein, of law firm Pachulski Stang Ziehl & Jones, said the company was being cut off by studios. He urged Judge Brendan Shannon to allow it to hold an auction on Sept. 21 or risk having the company liquidated as major studios pulled their film projects.

The judge made no immediate ruling, and the hearing was continuing on Wednesday afternoon.

"The studios are freaking out," Feinstein said. He said any delay in special-effects work risked upsetting carefully planned release dates for big-budget films.

But the judge suggested a short delay would allow creditors to organize and review the fairness of the sale process. "Is there a material difference that two weeks would make?" he asked.


Searchlight Capital has proposed an initial bid of $15 million for the company, which would be subject to competing bids and would require court approval.

Reuters on Tuesday reported that Prime Focus World, which created the special effects for the blockbuster "Avatar," was contemplating a bid, according to a person with knowledge of its interest.

FXGuide - What does it all mean?

Who to feel sorry for

There are many people to feel sorry for, and in no order here are a few:

• Employees who lost their jobs – especially those who relocated to Florida
• Students who started training at the for profit DD iInstitute thinking it might lead to a job in Florida. DDI started training formally at the start of this year, so these students have paid real money for an education that is now still valid but far less connected to any chance of employment
• Employees of In-Three who moved when the company was bought
• People including many employees who owned or bought stock in their company, they have seen their investments all but wiped out. At last look we saw the stock was trading at just 9c, from a 52 week high of $9.20. So $20,000 invested in DDMG would now be worth $195, if it was still trading and you could get that. In 10 months some $400 million of shareholder value has been wiped out, and that is before multiple Florida grants and subsidies have been applied
• Tax payers in Florida who have seen a huge amount of public money evaporate in an age of very tight state revenue. (Although some of the land given to DDMG will revert back to the city if DD cant meet its obligations by December 31st, 2012)
• Equipment, vendors and general suppliers left being owed money
• Every day artists who have faced and are facing uncertain times, questions about benefits etc and an unclear future
• Ed Ulbrich – he has his work cut out, but on behalf of DD staff who remain and those of us who enjoy their work, we wish him the best

Note, we did not put John Textor on this list.

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.

Scott Ross, one of DD's original founders, comments on the FXguide article:

Scott Ross says:
September 12, 2012 at 1:45 pm

Thanks for an interesting summation of the issues that faced DDMG. I know it’s petty, but I have to say it, because words are indeed powerful and if said enough, those words tend to be believed as the truth… even though they may be totally false.

Digital Domain was not started by James Cameron nor was it started by Stan Winston. Digital Domain was started by yours truly, Scott Ross. I came up with the idea of starting a new VFX company in 1992. At the time, I was planning on leaving LucasArts and starting a new ILM… and in fact, many of ILM’s top creative, technical and business folks were part of that effort. And when I say top… I mean all of top management, the two top VFX sups, an ex ILM vfx sup/art director that had become a director and a few very key technical people.

We took many meetings with financiers and investment banks in the hope that George might sell us ILM and the rest of LucasArts. George was not a seller and once we realized that, everyone in that group bolted, leaving me holding the bag.

At that point, with business plan in hand, ( called Phoenix Effects, aptly named I thought) I was contacted by Jim Cameron who had heard on the street ( through Scott Billups) that I was starting a new company. Jim asked if he could be part of this new venture and he wanted to bring his buddy Stan Winston to the party. We all got together and then Digital Domain was born. I changed the name on the Biz Plan and personally contacted many investors. I had a previous relationship w IBM and they brought in the $$$. I ran DD from its inception until the sale to Textor in 2006. I had little to no support from Mssrs Cameron and Winston during the time they were “involved” (1993-1998). From 1998 until 2006, I never saw them and never spoke to Cameron.

I, of course, had a great deal of help during those years… I did not ” do it myself”. The artists, the clients, the tech folks and the other admin people had a HUGE involvement in its success. And DD was successful. A great culture, great work, and after Cameron’s departure, mostly profitable. The company was sold in 2006 with a large cash position and NO debt!

What happened after 2006 was a perfect reflection of the new American form of Capitalism. It’s corporate ethic was the same as Bain Capital. though without the CEO running for President ( though I would watch what happens in FLA). At the end, most everyone got completely screwed… the FLA employees, the shareholders, the state of FLA, the cities of PSL and WPB, the students at FSU, the investors…. everyone. Lets see what becomes of Mr. Textor.


As for Ed Ulbrich, my heart goes out to him as well as all the employees of DD. I hired Ed back in 1993 when he was just 29. He’s spent 20 years at DD, has three great kids and married DD’s ex comptroller. He’s done an admirable job over the years. He helped build the old DD and had run one of the most successful commercial production VFX houses of all time. I’m not sure how privy Ed was to Textor’s shenanigans. I’m not sure how much input he actually had. I know Ed as an upright guy. He too had a family and needed to support his wife and kids. I can say that when Ed worked for me those 13 odd years, though at times we disagreed…he always held the passion of DD…. the Company that I started.

I wish him luck.
 

DMczaf

Member
Jun 6, 2004
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Digital Domain's other big project was "Jack the Giant Killer," a project so catastrophic DD employees came to call it "Jack the Company Killer."

What happened to you Singer?
 

Vyrance

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May 19, 2010
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This news sucked for my family. My sister had been working at the Port St. Lucie, FL office for about a year now. Had her first baby last month and was still on maternity leave when she was told she was being laid off. :(

She will probably have to look elsewhere outside of Port St. Lucie for a similar job.
 

XiaNaphryz

LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
Nov 5, 2005
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What happened to you Singer?

Less to do with Singer than DD, I'd imagine. Hopefully more studios will actually start thinking about due diligence along the lines of "hey, is this low vfx bid in any way realistic" before deciding to award a project.
 

commedieu

Banned
Jan 10, 2009
27,354
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Commedieu works for this company? Condolences.

Yeah, it was my constant source of freelance work. Been "permalance." there for a while. Already have some more gigs lined up. Sad times man. Sad times...

We made dreams come real. But, as the article says... they are telling folks to remain calm. Everyone is already out looking. No faith, shitty environment now. The atmosphere really made the place cool.
...and nothing of value was lost.



Remember the other day when I said we could be friends...? >:|
 

XiaNaphryz

LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
Nov 5, 2005
52,171
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Yeah, it was my constant source of freelance work. Been "permalance." there for a while. Already have some more gigs lined up. Sad times man. Sad times...

Have you been getting paid as of late? One of the recent articles mentioned freelance/contract work not getting payments.
 

Tex117

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Sep 20, 2011
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Im sorry commedieu.

That sucks. Sounds like you have enough things lined up to land on your feet.
 

commedieu

Banned
Jan 10, 2009
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Have you been getting paid as of late? One of the recent articles mentioned freelance/contract work not getting payments.

So far so good in venice. Things will instantly stop if this happens... Direct deposit.. so no hiccups yet.
 

XiaNaphryz

LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
Nov 5, 2005
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Judge blocks DD sale:

WILMINGTON, Delaware (Reuters) - A bankruptcy judge refused on Wednesday to approve a sale next week of Hollywood special-effects company Digital Domain Media Group Inc, which says it risks losing its movie studio clients if it fails to hold a fast auction.

The Oscar-winning company 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.


Digital Domain Chief Executive Ed Ulbrich told the court that studios would begin pulling work from the company on Thursday unless it had an emergency loan and an agreement to auction the company to a better-financed owner next week.

Judge Brendan Shannon called the speed of the proposed sale "unprecedented" and said he was worried about giving creditors time to assess the fairness of the process.

"I'm aware of the consequences of my decision," Shannon said.

He said it was the company's choice to wait until its finances were extremely dire before filing for bankruptcy.

Shannon suggested the company hold an auction on October 2. He also suggested holding a hearing on September 20 to approve the rules for bidding at the auction.


Digital Domain won an Academy Award for its work on "Titanic" and has created effects for more than 90 major films including "Pirates of the Caribbean: At World's End."

Private equity firm Searchlight Capital has proposed an initial bid of $15 million for the company.
 

XiaNaphryz

LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
Nov 5, 2005
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With the judge blocking of the sale, I wonder if the studio behind Ender's Game will decide whether a couple weeks of delay is too risky or not.
 

SCULLIBUNDO

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Dec 28, 2005
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With the judge blocking of the sale, I wonder if the studio behind Ender's Game will decide whether a couple weeks of delay is too risky or not.

Hopefully a disgruntled employee just trashes all the work on Ender's Game and the movie just dies. :(
 

Szu

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Dec 21, 2009
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Well, here's a bit on interesting news. I work at a large law firm in NY. Something came down the pipeline that a large auction will be conducted here.

We finally got word that the auction involves Digital Domain.
 

commedieu

Banned
Jan 10, 2009
27,354
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So, direct deposit people didn't get paid (No money in bank account) So hand checks had to be made.

hahah.. fucking hell.. talk about minister of defense "nothing to see here." damn shame.
 

Sinistral

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Jul 16, 2012
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The whole VFX industry is on a self-destructive downward spiral and has been for years. The billable hours charged for the actual work and resources needed for this have little to no impact on what is charged. The success of a movie also holds no benefit to these companies. The margins are hairline thin. Work is outsourced, and credits most often come after the catering. Almost every shot done in movies these days require some form of post work. Heavy VFX movies have been the highest grossing movies for a while, yet these VFX houses just can't stay above water.

There's in-fighting for and against unionization, there's a lack of education regards to employee rights and management, tax incentives are not optional, they're currently critical. The industry is relatively young and it's getting taken abused as such. Something has to change, and it's sad to see my friends work on contracts periodically at minimum wage and deadly hours for the "glamour" of working in the movies. As a fellow 3D artist on the outside looking in, there are better alternative avenues for the skill out there, you have to stick up for yourself and have a standard. It is still hard regardless.

I've been following this stuff on other 3D centric forums and, it's sad. It's only going to get worse before it gets better.
 

NetMapel

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Jun 6, 2004
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The vfx industry is definitely incredibly competitive. I wonder how other major vfx hubs like London and Vancouver are doing then. It seems to be nothing but bad news for California's vfx in recent time.
 
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