Digital Domain Media Group, Inc. (Re)

Digital Domain Media Group, Inc. (Re)

The court held that US Chapter 11 constituted a foreign main proceeding because the corporate group, including the Canadian subsidiary Digital Domain Productions (Vancouver) Ltd., was a highly integrated enterprise with its nerve centre, management, principal operations and creditor expectations located in the...

Source-derived case information.

Citation
2012 BCSC 1565
Parties
Petitioner: Digital Domain Media Group, Inc.; Secured Creditor: Tenor Opportunity Master Fund, Ltd. and others; Subordinated Secured Creditor: Comvest Capital II, LP; Stalking Horse Bidder / Interested Party: Searchlight Capital LP / VFX Holdings LLC; Proposed Information Officer: Alvarez & Marsal Canada Inc.; Canadian Subsidiary / Debtor: Digital Domain Productions (Vancouver) Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
18 September 2012
Procedural Posture
Recognition Under Part IV of the Companies' Creditors Arrangement Act (cross Border Insolvency) / Application for Recognition of US Chapter 11 Proceedings and Ancillary Relief; Urgent Interlocutory Hearing
Outcome
Recognition order granted: US Chapter 11 proceedings recognized as a foreign main proceeding; ancillary relief granted.
Legal Topics
CCAA Recognition, Foreign Main Proceeding, Centre of Main Interests (comi), DIP Financing, Ancillary Relief, Information Officer Appointment, Stay of Proceedings, Recognition of Foreign Orders
Source Language
english
Insolvency Cross Border Insolvency Bankruptcy Commercial Law CCAA Recognition Foreign Main Proceeding Centre of Main Interests (comi) DIP Financing +4 more

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Parties

Digital Domain Media Group, Inc.

Petitioner

Tenor Opportunity Master Fund, Ltd. and others

Secured Creditor

Comvest Capital II, LP

Subordinated Secured Creditor

Searchlight Capital LP / VFX Holdings LLC

Stalking Horse Bidder / Interested Party

Alvarez & Marsal Canada Inc.

Proposed Information Officer

Digital Domain Productions (Vancouver) Ltd.

Canadian Subsidiary / Debtor

Procedural Posture

Recognition Under Part IV of the Companies' Creditors Arrangement Act (cross Border Insolvency) / Application for Recognition of US Chapter 11 Proceedings and Ancillary Relief; Urgent Interlocutory Hearing

Legal Issues

  1. 1 Whether US Chapter 11 constitutes a foreign proceeding under s.45 CCAA
  2. 2 Whether Digital Domain is a foreign representative
  3. 3 Whether the US proceedings constitute a foreign main proceeding (COMI determination) for the corporate group including the Canadian subsidiary

Ratio Decidendi

The court held that US Chapter 11 constituted a foreign main proceeding because the corporate group, including the Canadian subsidiary Digital Domain Productions (Vancouver) Ltd., was a highly integrated enterprise with its nerve centre, management, principal operations and creditor expectations located in the United States; accordingly the US proceedings were recognized as a foreign main proceeding and ancillary relief was granted including appointment of an Information Officer, recognition of US First Day Orders and allowance of a DIP charge over Canadian assets to preserve enterprise value.

Court Disposition

Recognition order granted: US Chapter 11 proceedings recognized as a foreign main proceeding; ancillary relief granted.

Orders

  • Stay of proceedings in Canada under s.48 of the CCAA effective as specified in the order
  • Appointment of Alvarez & Marsal Canada Inc. as Information Officer with powers as set out in the draft order