Some businesses in New Jersey may find that, in light of financial decline, they may require the protections offered in bankruptcy. This may be especially true when businesses can no longer pay the debts owed to creditors, leaving them financially disabled. In some cases, once the business has initiated bankruptcy, such as Chapter 11, they find that they cannot recover from their economic difficulties fully without liquidating some assets, or selling a portion of their business to another entity. Such sales, it is hoped, can offer some financial relief to a struggling business.
This was the case for one large out-of-state entertainment group who recently filed for Chapter 11 bankruptcy protections. The company, Digital Domain, has agreed to sell a portion of their business to a joint venture owned by partnering foreign entities. As is the case with all such sales agreements, the bankruptcy court must approve the transaction before the sale can close.
The joint venture includes India's Reliance MediaWorks and China's Galloping Horse America, which have offered to purchase the visual effects department, Mothership Media unit and other portions of Digital Domain. The venture has agreed to pay $30.2 million for the acquisition.
Like many businesses in New Jersey that file for Chapter 11 bankruptcy protection, Digital Domain likely came to the knowledge that they were unable to satisfy their creditors with the income currently generated from their ventures. However, if the court approves the sale of the stated portions of their business, Digital Domain may be able to begin with a fresh start and a clearer, brighter financial future. For many companies, a successfully organized and filed Chapter 11 has the most beneficial outcome for the business and its employees.
Source: The Hollywood Reporter, "China's Galloping Horse, India's Reliance Win Auction for Digital Domain," Georg Szalai, Sept. 24, 2012