A business bankruptcy, whether it's a reorganization that keeps the firm in business or a business's liquidation, often involves the sale of assets belonging to that company. The bankruptcy of James Cameron's Digital Domain Productions included the sale of assets related to the company's stake in feature films, including part ownership in "Titanic" and the upcoming film "Ender's Game." The company filed for bankruptcy relief recently in federal court in New York and a week later filed for the same protection in Canada.
Digital Domain's sale of its film assets is a complicated process that has resulted in a joint bid by Reliance MediaWorks and Chinese film company Galloping Horse of $30.2 million for the company's assets. Digital Domain has been a leader in film visual effects since 1993, providing work for films such as "Pirates of the Caribbean: At World's End."
Digital Domain has produced advertising and visual effects for television shows as well as for movies. Its assets include production facilities in and a subsidiary company that creates commercials and video games.
Before the sale can be completed, the U.S. Bankruptcy Court in New York has to approve it and the three companies must decide on an asset-purchase agreement. The final distribution of ownership rights will be 30 percent for Reliance MediaWorks and 70 percent for Galloping Horse. The two companies have a total value of more than $25 billion.
Filing for bankruptcy removes the ultimate control over the sale of assets from a company such as Digital Domain and places it with the court. For residents of New York, Chapter 11 reorganization provides some control in the choice of asset buyers, while Chapter 7 liquidations do not. However, the final decision about a sale still rests with the court handling the bankruptcy case.
Source: NY Daily News, "Reliance MediaWorks to part-own James 'Titanic' Cameron firm," Sept. 24, 2012