Digital Domain Media Group Inc. (fka DDMGQ)

[Hashu]

Nice!!! Thanks for posting this.

[jamesnames]

Palm Beach Capital MOTION GRANTED!

11/28/2012 0541 Certification of Counsel Regarding Order Granting Motion of PBC Digital Holdings, LLC, PDB MGPEF DDH, LLC, and PBC DDH Warrants, LLC for Authority to Commence and Prosecute Certain Actions wit PBC Digital Holdings II, LLC on Behalf of the Debtors' Estates Against the Senior Notes Agent and Initial Senior Noteholders



Read it and weep. The battle is on.


Document 0541

http://www.kccllc.net/Docket/SearchResults.asp?T=3376

[dunkindonuts]

Where is the action? All I see is new court dates and more new court dates. Do you really know what you're talking about or are you just strategically "wishing" for this thing to take off. I'm honest... That's what I'm doing.

[Rtuell]

With all this goin on, how do u think it will effect the PPS?

[jamesnames]

Ready for some action. Bids.

Also, there is a big hearing going on right now. They rescheduled one set of auctions for the IP In Three patents for December 7th.




Tembo, and others, are going tomorrow. Lots of good possibilities.


Chuck Williams, the co-producer and co-director of "Tembo" with partner Aaron Blaise, said the two put in a bid with some business partners. Potential bids were due Monday.

Williams has said he'd like to see the rights to that movie sold quickly in hopes that it will continue to be made at Tradition Studios. Many of the people working on the movie when Digital Domain laid off 346 employees and filed for bankruptcy in September have since left Port St. Lucie.

"We're waiting to hear back," Williams said. "We're looking forward to the auction tomorrow and hoping all goes well."

Williams said, if successful, he is hoping to bring those workers back to Port St. Lucie and/or hire new workers for the project.

[jaxstraw]

The three big issues are:

1)Whether the Make Whole Penalty is enforceable

2)Whether Senior Lenders actually intended their investment to be equity in nature and not debt.

3)Whether they shorted based on inside info.

Forget #1 and #3.....even with a reduction of the Make Whole penalty there is not enough to put shareholders in the money.

And as far as 'shorting' the stock, even if true, it does not monetarily change the outcome of the BK case.

PBC is also going to have to show far more evidence than they have presented in their motions about this 'shorting' issue to have the Judge even allow it to be discussed in his court.

They are not allowed to 'fish' with claims backed no evidence to get it entered in court. They must show some sort of tangible proof with direct connections to Senior Lenders. And they have not done so. They just make the claim it happened.

That's not enough in a courtroom.

The penalty for that would be civil in nature and has no ties to how the NewCo is developed through distribution and the BK courts even if it somehow does get in.

#2 is the only scenario interesting enough to watch as it unfolds.

[jaxstraw]

Seems the one action left out of this statement was....selling
.

Yet that is what was occurring in fact. While it is true the shares were being bought.....it is also true that someone does not see these court dates as the great opportunity you have presented in certain scenarios and is divesting shares before they happen.

Someone is buying, or covering, or the market maker is creating action.

[jamesnames]

I feel that the Judge will set a date to hear more arguments. I cannot see how he can rule against them on everything. Bankruptcy Judges have authority to rule on all of these matters, obviously. The Judge may try to pass the buck to someone else, but either way, Palm Beach Capital is in it until they have their day in court.

At some point, if it is determined that the Senior lenders shorted shares while having inside information, then that shows unclean hands, and that is also illegal, which could lead to some sort of settlement or verdict.

Not only that, but Palm Beach Capital's argument that the Senior Lenders should have their debt converted to equity argument certainly has merit. I think the key is to somehow get to trial, either in BK court or elsewhere.

Unless the Judge denies every motion and doesn't set any future dates for arguments, or denies Palm Beach Capital a chance in the future to contest the Final DIP order and Make Whole Penalty, then I see next week a s a big win for shareholders.

The three big issues are:

1)Whether the Make Whole Penalty is enforceable

2)Whether Senior Lenders actually intended their investment to be equity in nature and not debt.

3)Whether they shorted based on inside info.


We also have auctions/asset sales starting Wednesday.



Nobody can predict short term price moves. But if we get some good news I could easily see 10 cents or more. If we somehow get some really good news, and the Judge either tips his hand in our favor, or renders some sort of favorable verdict, then I can see 20 cents or more, as that would set the stage for some sort of settlement, which would have to include shareholders, since that is what Palm Beach is fighting for, as they own 37 percent of the shares, while only owning 5 million in debt.

The only way Palm Beach Capital doesn't get destroyed here is if equity/shares come out with something.

Bids have been strong the last few days. As strong as they have been in three weeks. There looked to be endless bidding at 4.9 for the last two days, as every time shares would go off at that price the bid amounts remained the same.

Someone is buying, or covering, or the market maker is creating action. Either way, we have a real shot at a nice spike this week. There are 3 or 4 things that could go in our favor.

[Rtuell]

What do think it will do next wk due to the new suit?

[MasterBlastr]

Never mind him . . . hes all about the pump. Nothing else . . .

[jaxstraw]

That is the best action in weeks. Looking good here.

Actual trades show a very different story......more like someone is getting out before any court dates this week.

[jamesnames]

Could be rolling early next week.


Tuesday hearing and Wednesday potential asset sale auction announcements. Shorts might want to cover Monday. If we get any type of positive development at the hearing on Tuesday, we should hit 10 cents easily.

Today had the strongest bids in weeks. Tons of bids at 4.9 cents. That is the best action in weeks. Looking good here.

[jamesnames]

Document 0526 is a good one.

http://www.kccllc.net/Docket/SearchResults.asp?T=3376


Shorts are trying to get out this week. Strong bids have doubled the price in the last 10 days. They will want to cover during the shortened session on Friday, and then Monday, before the fireworks begin Tuesday.

[jamesnames]

Highest bid in weeks. 4.9 cents strong.

Should be good to go for a nice move any moment. If not later today then Friday or Monday.

[jamesnames]

Battle heating up. Shorts covering.

Senior note holders know that they are in a big fight. Court date set for next Tuesday November 27th, and asset sales and auctions start the following day.


Document 0512

http://www.kccllc.net/Docket/SearchResults.asp?T=3376


The document is the Senior note holders objection to Palm Beach Capital's motion, and it mentions that Palm Beach Capital is/was pushing for a settlement, which is good. It also mentions that the Unsecured Creditors committee is suing the former CEO plus former board member on behalf of the estate, through the D&O insurance policies, for 50 million!

I don't know how much they will get, but it will be a nice number, as this is exactly what that insurance is for.

Action is heating up.

[Hashu]

Volume kicking in hear!!!

[RedactedInfo]

Not surprised about LucasFilms...

The patents are quite valuable indeed.

According to dockets 370 and 371 both Disney and Marvel have submitted similar concerns about the sale in regards to their limited license rights to the patents.

Now Lucasfilm was acquired by Disney just very recently and it could explain why Lucasfilm jumped on the bandwagon a bit later than Disney.

Debtors/Lenders were working on some neutral territory to those concerns but were initially against the motions saying "...Debtors believe that such language is unnecessary and superfluous at a hearing to approve procedures governing the sale of the Assets." [from Docket 398] Judge has so far ordered [Docket 480] to not prejudice the rights of the limited licenses that Disney/Marvel had with the debtor and their predecessor in regards to the patents.

Regardless, you've got a big umbrella of companies (Disney) and other players floating around who will or have expressed interest in the patents so like some of you I'm expecting some fireworks and bumps to happen closer to the next set of auctions.

[jaxstraw]

And what are the consequences if/when something 'bad' happens at these current levels ?

Plus, you get a chance at an even higher price if/when something good happens.

Seems the 'full court press' is on to get others to buy shares here by only presenting the most glowing and optimistic scenarios......but never presenting the absolute fact that a high majority of these Chapter 11 cases turn out very badly for shareholders since the Debtor is given the most latitude by the courts for judgements in their favor to reorganize at the shareholders expense.....why is that ?

[jamesnames]

Almost a guarantee to double.

There is essentially zero chance that the shares won't hit 10 cents or more between now and April 13, 2013 (very conservative). Plus, you get a chance at an even higher price if/when something good happens.

This means that this BK cannot be finalized before a period of time AFTER April 13, 2013. Great news if you hold shares at 5 or so cents, for you have at least half a year to get multiple spikes in price, or otherwise have good news. Of course this motion will get rubber stamped, as all similar motions do.



Motion extending the time period for the Debtors to assume or reject any of the leases under which the Debtors are the lessee that may be considered unexpired leases of nonresidential real property (the "Unexpired Leases"), by ninety (90) days through and including
April 9, 2013

Absent a further order from the Court, the Debtors would be required to assume, assume and assign, or reject the Unexpired Leases by no later than January 9, 2013, which is the deadline established under section 3 65(d)(4) of the Bankruptcy Code.

The time within which the Debtors must assume or reject the Unexpired
Leases currently is set to expire on January 9, 2013. The Debtors’ efforts since filing its petition has been focused on (1) preparing for - and successfully completing - the sale of the Debtors’
California and Vancouver operations on an abbreviated time schedule, (2) finalizing the Debtors’ postpetition financing arrangements, (3) preparing and filing the Debtors’ schedules of assets and
liabilities and statement of financial affairs, and (4) formulating a strategy for the disposition of
the Debtors’ remaining assets.

Accordingly, the Debtors contend that the most appropriate course of
action is to extend the deadline for making such determinations regarding the Unexpired Leases for an additional ninety (90) days, through and including April 9, 2013, in order to facilitate the
sale of the Debtors’ remaining assets and continue to review the value of the Unexpired Leases.

Therefore, an extension of time is necessary to allow the Debtors to consider its options with respect to the Unexpired Leases.




I have a chance to make a shocking amount of money here. There are lots of possibilities, and many twists and turns to come.

There should be some action in the share price between now and November 27th, but if by some chance there isn't, then there is plenty of time for action in the many many months ahead. The price is so low that any buying pressure at all will move it up multiples from here, in an instant. Market cap is only about 2 million now...lol. Their tax benefits are worth a ton (NOL's). They may agree to give those to Palm Beach Capital as part of a deal, and Palm Beach Capital and move forward with some intact entity, possibly getting involved in the Legend of Tembo project.

It should be a fun ride in the very near future.

[jamesnames]

Valuable patents for sale.

In just one of the upcoming four separate asset sales.

How valuable? Well, Lucas Films (Star Wars, George Lucas).....


Lucasfilm Ltd. (“Lucasfilm”) and certain of its affiliates (“Lucasfilm”) hereby object and reserve all of their rights and remedies (the “Limited Objection”) to Debtors’ Motion for Order (I) Approving Separate Sales of Assets Free and Clear of All Liens, Claims, Encumbrances and Other Interests, (II) Assuming and Assigning Certain Executory Contracts and Unexpired Leases, and (III) Granting Related Relief [Docket No. 291] (the “Sale Motion”). In support of this Limited Objection, Lucasfilm respectfully represents as follows:

Pursuant to the Sale Motion, Debtors have requested authority to sell, among other things, the intellectual property assets originally held by In Three, Inc. (“In Three”) (the Debtors’ predecessor in interest) related to the conversion of two dimensional artwork to three dimensional artwork (the “In Three Patents”) in a separate sale (the “Patent Sale”) to a buyer who has not yet been identified (the “Patent Buyer”).

Lucasfilm is party to that certain Confidentiality and Cooperation Agreement dated as of May 1, 2006 (the Lucasfilm Agreement”) with In Three. The Lucasfilm Agreement is potentially affected by the Patent Sale. The Lucasfilm Agreement granted rights to Lucasfilm to use the In Three Patents in connection with a specified project (collectively, the “Limited License”). Section 8(a)(1) of the Lucasfilm Agreement provides a covenant not to sue, and a provision providing that the Debtors will not assign or grant the In Three Patents to any third party without such party executing an agreement to be bound by the terms of the covenant not to sue.

4. Although the project in connection with the Lucasfilm Agreement has been completed, pursuant to Section 5 of the Lucasfilm Agreement, the Limited License expressly survives the term of the Lucasfilm Agreement. Pursuant to Section 16, the Lucasfilm Agreement
(including Debtors’ obligations under the Limited License) are binding on all parties’ successors and permitted assigns. Section 16 also specifically provides that the Lucasfilm Agreement is a
license to intellectual property for purposes of Bankruptcy Code § 365(n).

5. Lucasfilm does not oppose the proposed sale of the In Three Patents, provided that rights under the Limited License are preserved in the orders entered in connection with the Sale Motion.


This is separate from the Legend of Tembo assets, which are worth millions RIGHT NOW. Plus, Tradition Studios assets, plus FSU school assets.

Shorty will be trying to sneak out of his shares and cover between now and November 27th. Good luck. You will need it.

In the meantime, the bid has inched up to 4.7 cents right now. Last week it was 2.5 cents for a time. Hehehehehe. We have tomorrow (Friday), then 5 days next week, then only one day the following week before the Court Hearing. That is only 7 days of trading.

We should be up substantially between now and then, and if we get the right verdict, or a compromise/settlement, then I would expect the price to jump to 15-20 cents or more. market cap is under two million right now. Lots of room to run. No shares available to buy cheap anymore.

We could hit 10 cents without any news the way this is going.

[jamesnames]

They are about to move it up over the next two weeks.

They just did a trade of 100 shares at 4.3 cents, when the real price now is mid 4's to 5 cents.

There will be at least one more launch into orbit here, no matter what happens in court or the asset sales.

It could easily inch up to 7 or so without any news at all, then when news comes it would simply double to 15, then go to 20 cents in seconds, if the news is good.

From now until about 2 weeks from now you will see the plan unfold. There is a real good chance for some manic buying activity like was seen from 8 cents to 32 cents, then again from 2 cents to 9 cents.

This is setting up for a monster move. Tuesday November 27th is a big court hearing, and we could have some settlement before that, unless the Senior Lenders want to take their best shot and live with the verdict. Four separate asset sale auctions are scheduled for the next day, November 28th.

So, only 7 more trading days left, and there can be news before that, like word of who is bidding on the assets, compromises, settlements, etc. This should just inch up until then, but we could easily spike if some shorts want to cover, or if someone has caught wind of some good developing news.

[llessurK]

You can tell by the way it trades that large blocks of available shares are hard to come by in this range. Moves up in large percentages on the tiniest trade sizes. Of course it can move down just as easily but the fact that the bid was moving up with each bid whack this morning tells me DDMGQ wants to move up now.

[llessurK]

DDMGQ looking really good today. Went from red to green entirely on bid whacks until the ask started to get hit, lol.

[jamesnames]

Too much pump? Lol

Not a single person is even posting regularly except for me. I don't care if the common survives or not. All I know is that there are numerous events coming up where there is potential great news. Shorts will cover, and speculators will speculate.

When stocks go from $6 to 2 cents in a little over a month, with a total share count of only 45 million, most of which are held by insiders who aren't selling, then that is about as good of a buying opportunity as you will ever see.

Common has a shot, too. There are deals that can be struck here.

The Ask is now 5 cents. Almost a double from last week where it leaked down due to the election falling on the same day as the hearing. There was nobody to report on it.

But as you can see, it is inching back up heading into the November 27th hearing and November 28th auctions.

I see that we just hit 5 cents. Very nice. This is with no news. Imagine what will happen when news comes out. This thing will continue to sneak up right before your eyes, just like I said it would a few days ago.

Love it.

[was GoldenDD]

does common survive here? looks like its gonna have zero value. Too much pump

[SchragerTrader23]

This is soo ready to go!! DDMGQ

[svt1159]

Moves on air.

[jamesnames]

Here comes the move.

Hold on to your hats. Gotta love it. You had a whole week to buy between 2.5 and 3.5 cents. We just hit 4, and now we should head higher over the next two weeks heading into the HUGE court hearing plus asset sales.

[MasterBlastr]

I'd say you got lucky on your .09-.30 swing. You will need to get lucky again if you are looking for a pop to get out of your .07's. Thats about all there is to say.

[Rtuell]

Well to begin with I bought the stock first at .09 before it ran to around .30, and made a wonderful return. So when it dropped again I thought I might try again but to show you how unlearned I am I didn't even know what the Q stood for. By the sound of this message board I don't know if it will make another run or not. I was just wanting some advice from people that has experience in bk stocks. Thanks

[jaxstraw]

Question...why did you invest in this in the first place ? It is important to know in order to answer your post.

[Rtuell]

I'm new to trading and I'm in DDMGQ at .07, should I sell now and chalk up the loss or is there hope it will get back there soon? Thanks

[jaxstraw]

It appears that even after the 363 sales ( Asset Sale) there won't be enough.

After reading all the submitted Schedules it appears that all the Debtors together are claiming only about $130mm in assets.

Yet all the liabilities are coming in at over $160mm .

Add in protracted legal costs and lawyer fees and that number keeps going up as this drags out for months.

Even if it is decided that the 'Make Whole' of $25mm needs to be reduced ( it won't be eliminated in it's entirety), or it is settled to a lower figure......

The numbers don't come up for any shareholder recovery based on what the Debtor has filed.

[jamesnames]

Sale and Auction info.

http://www.tcpalm.com/news/2012/nov/12/auctions-of-digital-domain-assets-in-port-st-nov/

The sale of Digital Domain Media Group assets including the bankrupt company's interest in the Tradition Studios and "The Legend of Tembo," an animated movie being made there, could come as early as Nov. 28.

According to a notice filed late Friday in U.S. Bankruptcy Court in Wilmington, Del., prospective buyers will be evaluated on, among other things, "the potential for hiring employees or re-employing (Digital Domain's) workforce."

Assets for the sale will be divided into five lots:

Rights to the in-progress films "The Legend of Tembo," "The Art Project," "Birds of a Feather" and "The Lightning Catcher."

Interest in Tradition Studios, the 115,000-square-foot animation studio built by Port St. Lucie and leased to Digital Domain.

Patents for a process to convert two-dimensional images into three dimensions.

Interest in Digital Domain Institute, a for-profit animation school in West Palm Beach run in partnership with Florida State University.

Digital Domain's "remaining fixed assets" in Florida.

Potential bidders are required to submit offer letters by Nov. 26. If more than one offer is received on the lots, auctions will be held. The first will be at 10 a.m. Nov. 28 in New York City, with subsequent auctions "from day to day as necessary."

The sales are scheduled to be finalized at 1 p.m. Dec. 4 by U.S. Bankruptcy Judge Brendan L. Shannon in Wilmington.

[jaxstraw]

Got news for you....in every case shareholders fight for what they can...

...but 'to the death' is a bit dramatic....LOL

...and the 'facts' still need to be determined by the court all there are right now a Motions where there are TWO sets of facts as each party sees them.

In this bankruptcy, the biggest shareholder is fighting to the death on important issues that are backed up by facts

[jamesnames]

If you read the Motion.

Palm Beach lays out the argument in great detail why the 35-40 million in notes that were issued in May should be converted to equity. If you don't want to read it then I am not going to explain their argument.

There is a hearing on November 27th about that. There is case law backing up their case. There is also tons of case law backing up the argument that the Make Whole Penalty is unenforceable.

All I know is that there are 45 million shares outstanding, and there are still shorts left to cover. There are not a lot of shareholders here, as only a few groups hold the bulk of the shares, and they, by definition, aren't selling.

So, I am not predicting what the judge will do on November 27th, but this is NOT your typical bankruptcy, where all parties involved are looking to scam the shareholders. In this bankruptcy, the biggest shareholder is fighting to the death on important issues that are backed up by facts.

My main point is that with the potential ruling in Palm Beach Capital's favor, as well as the four separate auctions coming up, that there is a strong likelihood that there shares pop again.

Also, most every party involved has made some sort of compromise. If it so happens that the Senior Lenders do not want to risk an adverse ruling in court, and some type of agreement is announced with Palm Beach Capital, then the shares will blast over 10 cents within 5 minutes. This is a possibility here.

There are lots of potential catalysts for a higher price in the next three weeks. What exactly are the catalysts for a lower price than 3 cents? What group of shareholders do you expect to unload shares between now and three weeks from now?

I'm done. Those who want to do real work know where to find the documents. I bought another 80,000 last week at .03, and I might even buy a few more, so it does me no good to convince others to buy right now.

100 years from now there will be about 10 stocks that haven't gone to zero. They all go to zero eventually, except the Coca Cola's, Proctor and Gamble's, etc. This bankruptcy cannot possibly be finalized before mid-2013, and that is the earliest. there are already specific dates that mention December 31st, and those dates have to happen before there can even be a BK exit plan filed, or a plan or liquidation. So, the shares will trade from now until whenever it is over. There are plenty of litigation issues as well, and Palm beach will be arguing from the position of SHAREHOLDER. Potential settlements could be from the senior lenders, as well as the D&O Insurance policies.

No matter what happens, the odds strongly favor a price of at least 6 cents in the next few weeks, as opposed to zero cents. They can only go down 3 more cents, and the upside is a lot higher than 6 cents.

[MasterBlastr]

James if this gets reclassified as equity, they basically lost the $5 million they loaned. It still puts commons (and this particular lender) $20 million away from getting a sniff. Either way, commons are burnt, black toast. Charcoal. No other way to explain it.

[MasterBlastr]

Exactly. They are not going to reduce their claims just to gift $$$ to the commons.

[jaxstraw]

It appears that nobody even reads.

All the reading required is in the numbers......

Read the Schedules and Statement of Financial Affairs since you claim you read 'all' the court docs and show how to make the Assets and Liabilities switch value at this point.

All the rest is just window dressing.....

POP QUIZ.......if the numbers for Liabilities don't add up to greater than Assets then what do shareholders get ?

After reading all the submitted Schedules it appears that all the Debtors together are claiming only about $130mm in assets.

Yet all the liabilities are coming in at over $160mm .

Add in protracted legal costs and lawyer fees and that number keeps going up as this drags out for months.

Even if it is decided that the 'Make Whole' of $25mm needs to be reduced ( it won't be eliminated in it's entirety), or it is settled to a lower figure......

The numbers don't come up for any shareholder recovery based on what the Debtor has filed.

[jaxstraw]

FALSE....................................................................

(and there are only 50 shareholders total here).

No. That is 51 shareholders of record is based solely on information obtained through either issued certs or it is a combination of issued certs and only the brokerages holding those certs.

The TA does not keep the names of individuals holding shares. It maintains share counts for the brokerages who transfer shares back and forth.

In the age of instantaneous online trading they consider individual brokerage's 'share holders of record'. It is up to the brokerages to send out forms for shareholders to register their shares for things such as dividends and proxy's.

If any shareholder has note received a form prior to the Nov 2 filing, than the brokerage becomes the shareholder of record that reports to the TA for all the shares their clients use.

This is why there is such a low number. It is brokerages and individuals who are in possession of certs.

[jamesnames]

It appears that nobody even reads.


There is a hearing on November 27th. Palm Beach Capital makes a good case, supported by case law, that the Senior Lenders loan was really intended as an equity investment, and therefore should be converted to equity.

If you aren't going to stay up to date on what is going on then why would you post? That is what the hearing is about. They laid out the facts, including how Digital Domain called them 'selling shareholders' in the pres release, as well as how the investment was going to be paid back in stock only, and not cash, over a period of 5 years.

And, if anyone thinks that the senior lenders should get the interest due now, that was to accrue over 5 years then they are mistaken. That is the Make WHole Penalty part that is usually not allowed in BK cases. So, if that goes, AND the senior loan is converted to equity, then shareholders are in the money. Shareholders are close to the money if only the Make Whole Penalty is eliminated.

Not only that, but Palm Beach Capital, who loaned Digital Domain 5 million less than a month before BK (as well as owning 37 percent of the shares), is allowed to credit bid the 5 million on any of the remaining assets if they wish.

This means that they will likely do so, as they were planning a bid with John Textor, that was announced in the weeks before BK. If they do this, it is likely that as part of the BK exit plan, shares remain intact, as they will want to have a continuing entity that can take advantage of the NOL's (tax loss carryovers) that can be used in the future to offset over 100 million in income from whatever entity goes forward.

That will be agreed to by everybody, as it is the only way to exit BK without a long drawn out fight (and there are only 50 shareholders total here). Now, if you were short at $6, and see that it is 3 cents heading into the next 2 1/2 to 3 weeks, would you risk an adverse ruling in court, or out of the blue bid for the assets during one of the four auctions? Or would you start covering?

If you were a market maker when would you run the shares up again? You would do that when news starts getting out who the bidders are, so you could create a frenzy and unload your remaining shares.

As the hearing date approaches on November 27th, if you were the senior lenders, would you strike some sort of deal with Palm Beach Capital, or would you roll the dice with the court? If you lose, you are in worse positions than Palm Beach Capital, as Palm Beach has a secured 5 million dollar loan that would be in front of equity if the senior lender loan is converted to equity.

There have been compromised by every party so far. There is no way for Palm Beach to not take a devastating loss unless somehow, someway, equity gets paid through BK, or continues on in some form after BK in order to use the tax credits.

There are lots of moving parts here, and I see that I am the only one who knows the facts and the timeline events, but that is expected.

The share price rose from 2 cents to 9 cents on no news at all two weeks ago. It will happen again, and likely go higher (due to the factors I mentioned), between now and the next three weeks. Each time that this stock has been left for dead it has gone wild to the upside. From 8 cents to 32 cents in essentially two days, then 2 cents to 9 cents in less than a week.

We are at the point now where the odds really favor a higher price again. I can't imagine it will stay quiet for three weeks, and I can't imagine a huge holders selling now before the hearing and auctions. So, we are likely going up.

[jaxstraw]

It appears that even after the 363 sales there won't be enough.

Assets floating around everywhere,

After reading all the submitted Schedules it appears that all the Debtors together are claiming only about $130mm in assets.

Yet all the liabilities are coming in at over $160mm .

Add in protracted legal costs and lawyer fees and that number keeps going up as this drags out for months.

Even if it is decided that the 'Make Whole' of $25mm needs to be reduced ( it won't be eliminated in it's entirety), or it is settled to a lower figure......

The numbers don't come up for any shareholder recovery based on what the Debtor has filed.

And the PPS is reflecting what serious distressed debt investors are interpreting from reading all the filings. They are not touching this.

[jamesnames]

We have AUCTIONS!

Order (A) Approving Procedures for Separate Sale of Assets; (B) Scheduling Auction and Hearing to Consider Approval of Sale and Assumption and Assignment of Certain Executory Contracts and Unexpired Leases; (C) Approving Forms of Notice; and (D) Granting Related Relief

November 28th is auction date.


Bids will be in before then, obviously, and we will likely see news about insiders, current and former, making bids for certain assets.


Document 0480

http://www.kccllc.net/Docket/SearchResults.asp?T=3376



So, not only do we have the court hearing about potentially converting senior lender debt into equity on November 27th, but we have the auctions on the 28th. That gives shorts about three weeks to ease on out and cover, unless they want to risk it.

There very well could be some type of settlement between Palm Beach Capital and the Senior Lenders, where the Palm Beach, as 37 percent shareholders, gets something. If they leave it in the court's hands, the senior lenders risk an adverse decision.

I have read the facts, and know the timeline of events that led to this bankruptcy. It should be interesting.

[jamesnames]

Hearing November 27th to determine whether senior loan will be reclassified as equity.

Notice of Hearing on Motion of PBC Digital Holdings, LLC, PDB MGPEF DDH, LLC, and PBC DDH Warrants, LLC For Authority to Challenge the Final Dip Order And Seeking Disallowance and/or Reclassification of the Senior Noteholders Claims

Objections need to be in by November 20th.


Unsecured Creditors's Committee gets 425K to investigate and pursue claims against Digital Domain Directors through their D&O Insurance policies. Investigation to be completed by December 15th. Any money not used to be returned to DIP Collateral fund by December 31st.

Palm Beach Capital and Senior Lenders agree not to pursue case in court other than BK unless, the court finds that it does not have jurisdiction to settle dispute. Senior Lenders agree to provide info regarding Palm Beach claims.

Asset Sales and auction proceeds up to 40 million to be included as DIP financing and returned to senior lenders as it comes in. Make WHole Penalty not included in that number as it is being disputed by Palm Beach Capital and it will be decided at Hearing November 27th. Palm beach Capital also as until early December to formally challenge the final DIP order.

There are key events coming up.

1) Asset sales and auctions at the end of the month. Final order hearing approving those sales is December 4th.

2) Palm Beach Capital motion asking for Senior Lender claims to be converted to equity is scheduled for November 27th.

3) Unsecured Creditor's Committee pursuing D&O insurance policies of Digital Domain officers (this could lead to a very nice payout, as it is almost a cinch).


Also, the alleged deregistering turned out to be a non event, as OTCMarkets announced today that the symbol stays the same DDMGQ, but since Digital Domain has announced that it will not be reporting in the future, it is changed to another Tier, which basically means nothing changes. Change in effect as of today.

It looks like they are playing around with the price today. It is also 100 percent certain that there are certain official dates scheduled, as of now, all the way until the last day of December, so that means that there is absolutely zero chance that this BK is settled any time soon.

If this is settled by August of 2013 I would be surprised, and that means it will trade all the way through, and there is no risk of having the shares canceled. They have to file a BK exit plan, or, in all likelihood, a liquidation plan, and this cannot happen until the other events happen, and then it will still be months after that for it to end.

Wit the Presidential Elections there wasn't much news about this hearing, but the asset sales will bring some news, as will the showdown in court coming up in just under three weeks.

It will move at some point. They are cashing out a few shorts at 2.5 cents today.

[JK357]

Looks like this is going no where, anybody have any info?

[TradeSmart.ai]

Waiting till it hits .01 before I jump back in, at that point all the limits will be filled and it will move back up to around .10 - .15, we won't know for sure where it will go until the 27th when new news comes out.

[jaxstraw]

Perfect. I told you.

LOL. You predicted a motion filed would lead to a hearing.

Imagine that.

Amazing.

[jamesnames]

Perfect. I told you.

November 27th Hearing. Judge may reclassify the whole group of secured loans as equity. At least, that is the argument of Palm Beach Capital, and they laid out a pretty good case.

Sorry shorts, but I dare you to go into November 27th not covering. If the Judge rules that the loan was essentially an equity investment, then the price goes up 10 times the next day.

Do you want to chance it? I didn't think so.

Notice of Hearing on Motion of PBC Digital Holdings, LLC, PDB MGPEF DDH, LLC, and PBC DDH Warrants, LLC For Authority to Challenge the Final Dip Order And Seeking Disallowance and/or Reclassification of the Senior Noteholders Claims

[MasterBlastr]

You were doing ok James until you fell face first into the pavement with this . . .

"and that means that if any unsecured get paid, then shareholders will like get something. "


LOL . . . uh, no sorry -

[jamesnames]

Do you guys even read the filings?

Read 0356, 0358, and 0360. This are legitimate arguments here. So, we need the Judge to put a little pressure on the secured lenders and either rule in favor of Palm Beach in part, or schedule another hearing, or suggest a compromise. But we have four auctions coming up, so there are multiple ways for longs to get a higher price in the next 30 days. The three obvious ways we go higher are 1) Positive Court Ruling, 2) Auction Asset sale news, and 3)Short Covering.

http://www.kccllc.net/Docket/SearchResults.asp?T=3376



Palm Beach Capital made a good case that the secured lenders loan shold be converted into an equity, as the repayment terms were in stock for a 5 year period. The repayment was not in cash, but stock.

Plus, the Make Whole Penalty nearly doubles the secured lender's money in just 4 months, and bankruptcy case law seems to suggest that this type of penalty in unenforceable. Even if the original loan is not reclassified as equity, if the Make Whole Penalty is eliminated, then the secured loan amount goes way down.

If you guys aren't going to read every filing, motion, and objection, then I suggest not investing.

Whatever happens, the shares will trade and we will have four separate auctions coming up in less than 30 days. But there is a legitimate chance that we get some type of favorable ruling, or compromise.

The really isn't much else to say. The price went form 6 dollars to 2 cents, then 9 cents, now 4-5 cents. If you think shorts should take their chances for the last 4 pennies, then that is fine.

I suggest that the facts give longs a reasonable chance of something favorable coming out of the hearing today. If that happens, we know that DDMG can move very quickly to the upside.

Also, if it is true that the secured lenders shorted Digital Domain while having confidential information, then there are claims that will be settled in favor of the longs. Palm Beach Capital spelled it out in their objection. Multiple times, the day before a negative press release involving Digital Domain and the Secured Lenders agreements, short interest increased significantly.

We have an exciting month ahead. The drama alone, no matter what the result, should create some action here. Plus we have the asset sales. It seems that a drop from 6 dollars to pennies should be called capitulation. It is not often that you have a 37 percent shareholder getting the short end of the stick in situations like this. They are usually on board. In fact, I cannot remember a case where a 37 percent shareholder had the rug pulled out on them like here.

Palm Beach Capital is FIGHTING UNTIL THE END. And that gives longs a chance. Plus, the United States Trustee laid out many reasons why certain unsecured creditors should not be favored over other creditors, and that means that if any unsecured get paid, then shareholders will like get something.

Lots of moving parts.