PORT ST. LUCIE, Fla. - READ CEO'S RESIGNATION LETTER BELOW
Digital Domain is closing operations in Port St. Lucie, the company announced Friday morning.
According to a news release, Digital Domain Media Group will be "reducing virtually its entire Port St. Lucie workforce, retaining approximately 20 employees who will remain as part of the wind-down."
About 280 workers are losing their jobs. Employees are packing boxes at the company offices this morning.
The company said DDMG's studios in California and Vancouver will without interruption, as will the Digital Domain Institute, based in West Palm Beach.
According to Port St. Lucie Police, a Digital Domain executive flew in from California to inform employees their doors were closing.
Port St. Lucie police were called in as a precaution.
The company was transferring employees from its Venice, Calif. office to Port St. Lucie, where the company's main focus was creating an animated movie, "The Legend of Tembo," as recently as three weeks ago, former Digital Domain CEO and founder Scott Ross said.
"It really breaks my heart when a company is started, and a company moves employees 3,000 miles away to a new home with a promise of a great future with the knowledge that there's a strong possibility that the company would be out of business or that it would shutter its doors," said Ross, who cofounded the company in 1993 before selling the business to Textor in 2006. "It's unconscionable to me that you can upset a human being's life and a family's life in the way that this company has."
Chief Executive Officer and Chairman of the Board of Directors of DDMG, John C. Textor has resigned, effective immediately, from his positions.
The company said Digital Domain executive Ed Ulbrich has been promoted to Chief Executive Officer of Digital Domain Productions.
Earlier this week Digital Domain Media Group defaulted on a $35 million dollar loan, according to a public filing with the Securities and Exchange Commission.
The company promised to create 500 jobs by 2014 and make annual payments toward its $40 million Tradition Studio in exchange for a $71 million state and city incentive package.
Will Greenlee & Eric Pfahler of Scripps Treasure Coast Newspapers contributed to this report
John C. Textor resignation letter:
To the Directors of Digital Domain Media Group:
I hereby resign as a director of Digital Domain Media Group, Inc. (the "Company") effective as of the close of business on September 6, 2012.
As you are aware, I am in profound disagreement with the decision to close our animation and visual effects studio in the wonderful community of Port St. Lucie, Florida. The people of Florida welcomed us with open arms and we certainly owed them greater consideration. We were able to hire and train local residents and have them mentored by the very best of our industry. Our incredibly talented artists and filmmakers were building something truly special in Port St. Lucie, not just our favorite first film, The Legend of Tembo, but also our first home, Tradition Studios. I am deeply saddened and heartbroken by this decision.
I believe that each of you as directors, and specifically those on the Strategic Alternatives Committee, have tried to do your very best to deal with the unfortunate consequences of our life as a public company. I also know that, in making your decision, you relied on the counsel of highly qualified advisors and legal representatives. That said, I think the outcome was not only unwise, but also without compassion. While I understand and support the effort to streamline costs, I believe this to be the wrong path. It is never a bad time to reconsider a bad decision. This can be reversed immediately.
Although I will no longer be a member of the Board, I intend to stay actively involved as a shareholder of the Company, and a believer in Florida. This decision will hopefully give me greater flexibility to independently consider other strategic alternatives for the Company, the Port St. Lucie studio and the people affected.
God bless you and thank you for your service.
/s/ John C. Textor
STATEMENT FROM DIGITAL DOMAIN:
Digital Domain Media Group Initiates Strategic Realignment. Company Begins Cessation of Florida Studio Operations
PORT ST. LUCIE, Fla.—September 7, 2012— Digital Domain Media Group, Inc. (NYSE: DDMG) today announced that it has initiated a strategic realignment that will enable it to focus its resources on its core business, Digital Domain Productions, Inc., a company focused on creating digital visual effects, CG animation and digital production for the entertainment and advertising industries.
As a key part of this strategic realignment, DDMG has begun the cessation of its Port St. Lucie operations by reducing virtually its entire Port St. Lucie workforce, retaining approximately 20 employees who will remain as part of the wind-down.
DDMG's studios in California and Vancouver intend to continue to operate without interruption, as will the Digital Domain Institute, based in West Palm Beach, Florida. Long-time Digital Domain executive Ed Ulbrich has been promoted to Chief Executive Officer of Digital Domain Productions.
Digital Domain Productions is working closely with its clients, vendors and other critical constituencies throughout this process.
DDMG is implementing this important operational change and will continue to evaluate various restructuring alternatives, as previously disclosed, as part of its effort to reduce its overhead and restructure its long-term debt.
As previously announced, DDMG is continuing to work with the holders of its senior secured convertible notes, each of whom has agreed to forbear temporarily from exercising its remedies under such senior notes until such time as it elects to withdraw such forbearance on not less than 48 hours' advance notice to DDMG. An inability by DDMG to quickly access additional sources of liquidity to fund its current operating cash needs would materially adversely affect its financial condition and would require it to seek relief or protection from its creditors.
John C. Textor has resigned, effective immediately, from his positions as Chief Executive Officer and Chairman of the Board of Directors of DDMG, as a member of the Board of Directors of DDMG, and from all positions as an officer and director with all subsidiaries of DDMG.