Troubled Digital Domain Media said Friday that John Textor has resigned as CEO and chairman of the board as part of a strategic realignment that also involves closing down operations at its headquarters in Port St. Lucie, Fla., a move Textor called “without compassion” that should be reversed immediately.
About 20 employees there will remain for the wind-down, the company said in a statement. The studios in California and Vancouver will continue to operate without interruption, as will the Digital Domain Institute in West Palm Beach.
Michael Katzenstein, currently interim chief operating officer, will assume day-to-day responsibility for the company’s headquarters and operations in Port St. Lucie as the board starts a search for a new CEO of the parent company.
In a release clarifying its earlier announcement, Digital Domain said longtime company exec and chief creative officer Ed Ulbrich was named CEO of Digital Domain Productions, which oversees the lion’s share of the company’s business.
The company, which is teetering on the verge of bankruptcy, said the move will enable it to focus resources on its core business of digital visual effects, CG animation and digital production for entertainment and advertising as it explores ways to restructure its debt and slash overhead. It said it’s “working closely with its clients, vendors and other critical constituencies throughout this process.”
In a letter to Digital Domain’s board of directors, Textor officially resigned and said he was “deeply saddened and heartbroken” by the decision to close Port St. Lucie. “The people of Florida welcomed us with open arms and we certainly owed them greater consideration. We were able to hire and train local residents and have them mentored by the very best of our industry. Our incredibly talented artists and filmmakers were building something truly special in Port St. Lucie.”
Digital Domain reached a temporary truce with lenders earlier this week after defaulting on the terms of its loans. Creditors agreed not for force repayment of $35 million in principal for a while as the company examines options which it has said could include refinancing by an institutional investor or a significant equity investment by a business partner, both undisclosed.
Banks need to give Digital Domain at least 48 hours notice if they want the payment, which could force the company to file for Chapter 11.
The stock has plunged in recent days as investors fled. On Thursday, execs canceled a scheduled presentation at the 2012 Gateway investor conference in San Francisco.