Digital Domain Media Group Inc. (DDMGQ:US), the bankrupt provider of special effects for the movies “Transformers” and “Titanic,” won a judge’s approval to sell its business to a partnership of Chinese and Indian film companies.
U.S. Bankruptcy Judge Brendan Linehan Shannon said he would sign an order approving the sale after lawyers work out the final wording.
Units of Beijing Galloping Horse Film Co. and Reliance MediaWorks Limited, based in Mumbai, won an action for Digital Domain, whose special-effects artists have won multiple Academy Awards, including one for the Brad Pitt movie, “The Curious Case of Benjamin Button.” The companies agreed to pay $30.2 million, plus take on contracts worth $3.6 million and pay $2.9 million in employee wages, according to court records.
“We had an outstanding result,” company attorney Robert Feinstein said in court yesterday in Wilmington, Delaware.
Digital Domain, with operations in Florida, California, Canada, India, China and Abu Dhabi, filed for bankruptcy on Sept. 11 with plans to hold an auction for most of its assets, including an investment in “Ender’s Game,” the science-fiction movie starring Harrison Ford that is scheduled to be released next year.
Galloping Horse will fund $20 million of the purchase using an interest-free loan from the Beijing Municipal Bureau of Radio, Film and Television, through a government-affiliated investment agency. Galloping Horse’s unit will own 70 percent of the company and the Reliance unit the rest.
Payam Shohadai, co-founder of digital effects company Luma Pictures, said the sale reflects a change in the U.S. movie industry.
“What was once firmly a US market to lose, is now irrefutably a global market,” Shohadai said. “Growth of the Chinese and Indian industries is just an accepted part of business in many fields. We need to make sure that the U.S. industry gains enough tools to level the playing field against foreign subsidies and low wages.”
The case is In re Digital Domain Media Group Inc., 12-12568, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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