Commencement Date: 
Country, State of Foreign Proceeding: 
United States, District of Delaware
Canadian Court: 
Supreme Court of British Columbia
Digital Domain Media Group, Inc. and 13 of its affiliates (the “DDM Group”) commenced voluntary reorganization proceedings in the U.S. under Chapter 11. The DDM Group specialized in digital visual effects and computer generated animation for major motion picture studios, advertisers and videogame developers. One member of the DDM Group, Digital Domain Productions (Vancouver) Ltd. (“DDP Vancouver”) was a Canadian entity. A substantial portion of the DDM Group’s operations were conducted through DDP Vancouver. However, the Canadian Court found that there were a variety of significant factors that rebutted the presumption that the COMI of DDP Vancouver was where its head office was located, including (i) the highly integrated nature of the DDM Group and the fact that it was readily ascertainable to creditors that its nerve centre was located in California; (ii) the movie projects that produced 90% of the DDM Group’s revenue emanate from and were managed from the U.S. (although significant work was done in Canada); (iii) all operational, strategy and legal decision making, marketing, communications, cash management and other business oversight was conducted from the DDM Group’s California headquarters; (iv) all major decision-making relating to the Canadian entity occurred in the U.S. and all directors, officers and senior executives resided there as well; and (v) DDP Vancouver was not authorized to solicit, create or submit bids to market its services. The Canadian Court therefore declared that Digital Domain Media Group, Inc. was the “foreign representative”, that the COMI of all of the affiliates was the U.S. and that the U.S. proceedings were “foreign main proceedings.” As well, the Canadian Court recognized certain U.S. orders, including an order granting a charge to secure DIP financing.