Digital Domain Media Group defaults on payment obligations and is in talks to emerge from financial crisis.
Digital Domain Media Group said Tuesday it has defaulted on payment obligations and is in talks with a lender and strategic partner to emerge from financial crisis, according to a report by The Palm Beach Post.
In an SEC filing, the company said it has appointed Michael Katzenstein interim chief operating officer reporting to a new special board committee. Katzenstein is a senior managing director of FTI Consulting.
Digital Domain has been financially troubled this summer as it failed to meet certain debt covenants with lenders, and was ultimately given a month to restructure its debt. With no agreement in place by late August, lenders cried default and demanded full repayment of principal and interest of about $55 million.
Because of the loan default, Digital Domain said in a filing with the Securities and Exchange Commission, it now must pay $51 million, including $16 million in interest and penalties, to a group of institutional investors led by Tenor Capital Management of New York. But Digital Domain had only $6.6 million in cash on its balance sheet as of June 30, and the company said bankruptcy is a possibility.
“I wish we never went public,” Textor said in a presentation to West Palm Beach city commissioners. “We’re a very confusing story as a public company.”