Reuters: Bankruptcy News: Judge skeptical of quick sale of special-effects firm

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Judge skeptical of quick sale of special-effects firm Sep 12th 2012, 17:58 Wed Sep 12, 2012 1:58pm EDT * 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. Link this Share this Digg this Email Reprints

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