--John Textor resigns as chairman and CEO
--About a third of the company's employees laid off
--Board and interim chief operating officer to make decisions
for company
(Adds details on Mr. Textor and the company's executive plans,
as well as a share price update, in the second to fourth
paragraphs.)
By Ben Fox Rubin
Digital Domain Media Group Inc. (DDMG) said its CEO resigned and
it will shut down its Port St. Lucie operations, cutting nearly all
its staff at the location, as the embattled company starts a
strategic realignment to focus on its core digital special-effects
business.
Shares sank 40% to 59 cents Friday after being halted for much
of the day. Shares are down 91% so far this year.
John C. Textor stepped down, effective immediately, from all his
company positions, including chief executive and chairman.
Following Mr. Textor's exit, the company's board and interim chief
operating officer will be making decisions on behalf of the
company, Digital Domain said, and the company is still weighing its
options on appointing a new chairman and CEO.
Mr. Textor had been the target of harsh personal attacks by two
anonymous commenters on a message board, with some statements
referencing his children and wife, according to the Palm Beach
Post. Fearing for his family's safety, he persuaded a local judge
this week to order Yahoo Inc. (YHOO) to remove the posts, the
publication said. A spokeswoman for the company declined to comment
on the situation.
Ed Ulbrich, the company's chief creative officer, was named
chief executive of Digital Domain Productions Inc., the company's
core special-effects business.
As of March 1, the company employed about 933 full and part-time
employees, with 272 employees located at Port St. Lucie, Fla. Only
about 20 employees from that location will remain as part of the
wind-down, the company said.
Digital Domain has been struggling to stay afloat, as it
recently defaulted on six senior notes worth about $35 million, and
accrued interest and other amounts worth an additional $16 million.
It has received a reprieve from its creditors, who agreed to delay
pursuing remedies, including foreclosing on the company's
properties.
Last month, the company said it plans to evaluate a broad range
of strategic and financial alternatives, including a potential sale
of the company. On Friday, the company said it will continue to
evaluate restructuring alternatives as it looks to reduce overhead
and restructure its long-term debt.
Digital Domain said its studios in California and Vancouver
intend to continue operating without interruption, as will the
Digital Domain Institute, a for-profit post-secondary school in
West Palm Beach, Fla., which is as partnership with the Florida
State University.
Digital Domain, which went public in November, has struggled to
climb out of the red as operating costs have remained high while
revenue has wavered.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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