I admit it, it’s hard to look away from the unfolding drama of animation/vfx shop Digital Domain‘s financial woes. Earlier today, Digital Domain stock sank nearly 32% to a new low of $1.41. The drop happened after the company defaulted on a $35 million dollar loan.
The TCPalm.com has plenty of not-so-nice details on Digital Domain’s long-term prospects. In a filing with the Securities and Exchange Commission (SEC), Digital Domain said it now owes $51 million to an investment group led by New York-based Tenor Capital Management. That amount includes $16 million in interest and penalties. The company also hinted in its filing with the SEC that it may seek bankruptcy protection: “An inability to quickly access additional sources of liquidity to fund the company’s current operating cash needs would materially adversely affect its financial condition and would require it to seek relief or protection from its creditors.”
Digital Domain CEO John Textor, who apparently doesn’t just create holograms but also constructs entire alternate universes that have no foundation in reality, doesn’t think $51 million is a lot of money nor does he even think the company defaulted on its loan.
In the video posted above, he told WPTV, “We, in my opinion, owe a very small amount of money to the banks versus the value of this enterprise. This is all about a disagreement with a lender. There was no missed payment or financial default. This is about a contractual dispute.”
One would assume that with Digital Domain’s financial troubles, Textor would be dedicating all his energies to saving the company. Not so. While hundreds of his employee’s livelihoods lay on the line, Textor has been spending some of his time trying to get Florida courts to go after the real villains: random people writing comments about him on the Internet.
According to a report published today on the website GossipExtra, Textor and his wife Debbie have asked Florida courts to force Yahoo! to take down message board posts about his financial dealings because they are causing “extreme emotional distress” to his family. Says Gossip Extra:
Textor, meanwhile, tried to have his complaint against cyberstalkers John Doe No 1 and No. 2 shielded from the public. His motion was denied by the judge in Stuart [Florida]. John Doe No. 1 posts under the name investedjp and No. 2, flypapernhoney. Both, according to the paperwork, have been writing statements that Textor described as “increasingly desperate and hostile” on a Yahoo Finance message board.
In one comment, investedjp — who claims to be a Palm Beach investor — threatens to link to negative Securities and Exchange Commission filings about Digital Domain. In early August, another posting warned Textor that he could end up in a federal prison cell with Madoff. Some have mentioned his children, and one his comely wife Debbie.
No other major animation website has been covering Digital Domain’s story besides Cartoon Brew, but there are other fine sources to look toward for coverage including the business section of the Palm Beach Post and VFX Soldier, the latter which has Digital Domain co-founder Scott Ross participating in the comments section.
UPDATE (September 5, 2:35pm ET): John Textor is finally WINNING! Today, he succeeded in stifling the First Amendment rights of other Americans by convincing a Florida judge to remove Internet comments that revealed his financial dealings. Meanwhile, Digital Domain stock has plummeted a further 24% as of this afternoon to a new all-time low of $1.07.