Bankrupt Digital Domain announced Thursday night that bondholders have agreed to provide close to $12 million in financing to help keep it running and that Searchlight Capital has reiterated its interest in acquiring the company.
Searchlight entered into a purchase agreement with Digital Domain several days ago in tandem with its Chapter 11 filing but the deal needs approval from the bankruptcy court judge and could be put aside for a higher or better offer. The company will be formally put up for auction on Sept. 21 in New York.
Digital Domain Productions CEO Ed Ulbrich said, “I am grateful to our senior noteholders, our partners at Searchlight, and especially our clients, for staying with us through this complex transaction. I want to thank everyone on behalf of the 733 employees of Digital Domain and Mothership and their families. We continue to deliver high quality work to our clients throughout this process, and this financing lets us move forward uninterrupted.”
The approximately $11.8 million of debtor-in-possession financing combined with cash from ongoing operations means the company can meet its expenses, including employee wages and benefits and payments to vendors and suppliers.
Searchlight co-founder Eric Zinterhofer said its agreement “demonstrates our support and belief in the visual effects business of Digital Domain, led by Ed Ulbrich and his team.”
He noted that Searchlight if it chosen as buyer, has “made a significant commitment to capitalize the business, which will allow Digital Domain to thrive as a leading visual effects company.”
“The senior noteholders are delighted to have Searchlight involved,” a representative for that group said in a statement.
DDMG filed for bankruptcy in the U.S. and a parallel process in Canada earlier this week throwing the effects industry into a tizzy amidst outpouring of support. A public company since 2011, it was de-listed from the New York Stock Exchange.