WILMINGTON, Del. — Select Digital Domain Media Group employees will be paid under a secret compensation plan without objections from other employees, according to federal bankruptcy court documents.
A $350,000 maximum payment plan for unspecified "eligible employees," including at least one "insider," who worked to get a high price at a Sept. 21 auction of some bankrupt company's assets was approved Monday by U.S. Bankruptcy Judge Brendan L. Shannon.
Until last week, former Digital Domain employees who filed a class-action lawsuit seeking back pay and benefits had blocked the so-called "Key Employee Incentive Plan," but the group withdrew its opposition Oct. 18. Employees had complained the plan lacked basic information, such as whether the employees are senior executives, middle management or rank and file.
As part of the negotiations, the payment plan was revised, but "the total amount is still the same," Timothy P. Cairns of Pachulski Stang Ziehl & Jones in Delaware, who is representing Digital Domain, said Tuesday.
Documents outlining the initial and revised incentive plans and employees' opposition and withdrawal are sealed. Cairns and other attorneys declined to comment.
In prior court filings, Digital Domain said the fund was necessary to keep the "uninterrupted services" of crucial employees ahead of a Sept. 21 auction of some company assets.
At the auction, a consortium of Galloping Horse Film Co. in Beijing, China, and Reliance MediaWorks Ltd. in Mumbai, India, paid $30.2 million for Mothership Media and other businesses and assets of Digital Domain Productions Inc., including studios in California and British Columbia and a coproduction stake in "Ender's Game," a science fiction movie starring Harrison Ford scheduled to be released next year. Tradition Studios in Port St. Lucie was not part of the sale.
More assets will be sold in the months ahead. Those include rights to "The Legend of Tembo," about an African elephant that struggles to return home after being captured and whisked away to India.
The former employees filed suit under the federal Worker Adjustment and Retraining Notification Act, which protects personnel from a mass layoff. In opposing the secret payments, their lawyers noted that the former employees cared about how Digital Domain spent its money — since they were owed money.
Digital Domain, which received some the promised $135 million in government-backed incentives for its startup digital animation movie business, laid off 346 employees and shuttered Tradition Studios Sept. 7 and filed for bankruptcy Sept. 11.