Editing Digital Domain (section)

=== Bankruptcy, financial restructuring, and lawsuits ===
On September 11, 2012, Digital Domain Media Group Inc. filed for Chapter 11 bankruptcy protection after the company's hedge fund lenders alleged the company defaulted on a minimum cash covenant relating to a $35 million loan. DDMG's lenders proposed a deal to sell its operating businesses–Digital Domain and Mothership—to a private investment firm, [[Searchlight Capital Partners]], for $15 million. At the public auction on September 21, 2012, Digital Domain's visual effects business and its principal animation feature film properties were instead acquired by a joint venture led by a leading DDMG shareholder [[Beijing Galloping Horse Group|Beijing Galloping Horse America, LLC]] in partnership with Reliance MediaWorks (USA) The sale was approved on September 24, 2012.<ref>{{cite news |last=Szalai |first=George |date=September 24, 2012 |title=China's Galloping Horse and India's Reliance MediaWorks Win Auction for Digital Domain |url=https://www.hollywoodreporter.com/news/digital-domain-auction-galloping%20horse-reliance-china-india-400103 |access-date=September 24, 2012 |work=The Hollywood Reporter}}</ref>

In July 2013, approximately nine months after Digital Domain filed for bankruptcy, the majority ownership was acquired by Hong Kong listed public company Sun Innovation. This acquisition placed an approximate $3.5 billion valuation on Digital Domain, with Reliance MediaWorks continuing to own the minority stake. Daniel Seah was appointed CEO.<ref>{{Cite news |date=July 27, 2013 |title=Digital Domain 3.0 Becomes Part of Sun Innovation |url=http://www.businesswire.com/news/home/20130726005913/en/Digital-Domain-3.0-Part-Sun-Innovation |access-date=November 11, 2013 |work=Press release |publisher=Digital Domain}}</ref> Seah spearheaded the bankruptcy acquisition and protection of Digital Domain by DDMG shareholder Beijing Galloping Horse America, LLC.

The bankruptcy and financial restructuring of Digital Domain triggered a number of lawsuits naming John Textor, former Apple CEO John Sculley and the entire Board of Directors, the auditors and others involved in the business and in the IPO offering.<ref>{{cite web |date=20 September 2012 |title=Berman DeValerio Files Securities Class Action Lawsuit against Former Executives and Directors of Digital Domain Media Group, Inc. |url=http://www.businesswire.com/news/home/20120920006639/en/Berman-DeValerio-Files-Securities-Class-Action-Lawsuit |access-date=25 May 2013 |work=Business Wire}}</ref><ref>{{cite web |last=Howk, Scripps Treasure Coast Newspapers |first=Alexi |title=Digital Domain lawsuits: Three suits accuse Digital Domain of lying about financial status |url=http://www.wptv.com/dpp/news/region_st_lucie_county/port_st_lucie/digital-domain-lawsuits-three-suits-accuse-digital-domain-of-lying-about-financial-status |url-status=dead |archive-url=https://web.archive.org/web/20131111221738/http://www.wptv.com/dpp/news/region_st_lucie_county/port_st_lucie/digital-domain-lawsuits-three-suits-accuse-digital-domain-of-lying-about-financial-status |archive-date=11 November 2013 |access-date=25 May 2013 |publisher=WPTV.com}}</ref><ref>{{cite news |title=Securities Class Action Lawsuit Filed Against Digital Domain Media Group, Inc.; Shareholders With Large Losses Encouraged to Contact Holzer Holzer & Fistel, LLC Regarding November 19th Lead Plaintiff Deadline |url=https://finance.yahoo.com/news/securities-class-action-lawsuit-filed-170823170.html |access-date=25 May 2013 |work=Yahoo! Finance}}</ref><ref>{{cite magazine |title=Former Digital Domain CEO & Auditors Sued For Fraud By Investors |url=https://deadline.com/2013/05/digital-domain-ceo-auditors-sued-fraud-lawsuit-james-cameron-505591/ |access-date=25 May 2013 |magazine=[[Deadline Hollywood]]}}</ref>

In February 2015, the [[New York Supreme Court|Supreme Court of New York]] and the Inspector General of the State of Florida cleared Textor of any financial wrongdoing,<ref name=":0">{{cite web |author=<!--Not stated--> |date=2021-08-21 |title=Supreme Court of New York Terminates Lawsuit against John Textor |url=https://www.prweb.com/releases/supreme_court_of_new_york_terminates_lawsuit_against_john_textor/prweb12531982.htm |access-date=2021-08-11 |website=[[PRWeb]] |publisher=Cision PR Web }}</ref><ref name=":1">{{cite report |url=https://www.flgov.com/wp-content/uploads/2013/03/report.pdf |title=Review of the Economic Incentive Award to Digital Domain Media Group |author= |date= |publisher=Executive Office of the Governor |page=2 |docket=2013-11 |author-link= |access-date=2021-08-11}}</ref> and ''[[The Athletic]]'' reported that he had received a settlement from the hedge fund that caused the collapse.<ref name=":2">{{cite web |author=Matt Slater |date=2021-07-10 |title=Crystal Palace takeover: Benfica arrests cast doubt over Textor's partnership plans |url=https://theathletic.com/2699565/2021/07/10/crystal-palace-takeover-benfica-arrests-cast-doubt-over-textors-partnership-plans/ |access-date=2021-08-11 |website=theathletic.com |publisher=The Athletic}}</ref><ref>{{Cite web |last=Tiffany |first=Kaitlyn |date=2018-10-23 |title=Amy Winehouse is going on tour: The dead celebrity hologram industry, explained |url=https://www.vox.com/the-goods/2018/10/23/18010274/amy-winehouse-hologram-tour-controversy-technology |access-date=2022-04-15 |website=Vox |language=en}}</ref>

Palm Beach Capital, the largest investor in DDMG, identified hedge funds, Tenor Capital et al., as the primary cause of the company's difficulties. Palm Beach Capital cited unlawful finance penalties and possible illegal short selling strategies designed to damage the company's public stock price.<ref>{{cite web |title=Dow Jones & Co. : Digital Domain Investor Palm Beach Capital Sues Over $25M Fee |url=http://pevc.dowjones.com/Article?an=DJFLBO0020121130e8buncoit&cid=32135011&ctype=ts&pid=15&ReturnUrl=http%3a%2f%2fpevc.dowjones.com%2fArticle%3fan%3dDJFLBO0020121130e8buncoit%26cid%3d32135011%26ctype%3dts%26pid%3d15 |access-date=2013-09-27 |archive-date=2013-11-11 |archive-url=https://web.archive.org/web/20131111222528/http://pevc.dowjones.com/Article?an=DJFLBO0020121130e8buncoit&cid=32135011&ctype=ts&pid=15&ReturnUrl=http%3a%2f%2fpevc.dowjones.com%2fArticle%3fan%3dDJFLBO0020121130e8buncoit%26cid%3d32135011%26ctype%3dts%26pid%3d15 |url-status=dead }}</ref><ref>{{cite news |date=2012-10-30 |title=Motion seeks to limit how much Digital Domain lenders should be paid back |url=http://www.tcpalm.com/news/2012/oct/30/no-headline---tc_sl_ddmg/ |publisher=[[The Stuart News and TC Palm]]}}</ref> Ultimately, the hedge fund lenders agreed to settle outstanding claims by the DDMG parties through a May 2016 settlement agreement awarding $8.5 million to former CEO John Textor and $3 million each to the city of Port Saint Lucie and the state of Florida.<ref>{{Cite web|url=https://www.tcpalm.com/story/news/local/shaping-our-future/property-values/2016/05/24/port-st-lucie-state-each-gets-3-million-in-digital-domain-settlement-textor-to-get-85-million/89393494/|title=Port St. Lucie, state each gets $3 million in Digital Domain settlement; Textor to get $8.5 million|first=Nicole|last=Rodriguez|website=Treasure Coast}}</ref> The settlement also assigned all technology assets of Digital Domain's Florida studio.