Digital Domain Investor Palm Beach Capital Sues Over $25M Fee
Stephanie Gleason
November 30, 2012
(c) 2012 Dow Jones & Company, Inc.
Palm Beach Capital, a private-equity firm that holds a 37% stake in Digital Domain Media Group Inc ., is suing investor Tenor Opportunity Master Fund Ltd. and other related investors over what it calls an "unlawful" penalty that pushed its claim against Digital Domain to $70 million from $35 million in just four months.
Tenor provided Florida-based Digital Domain with a $35 million loan about four months ago, prior to the company's Chapter 11 filing, according to the suit. The $25 million fee that increased Tenor's claim against Digital Domain, referred to as a "make-whole penalty," is meant to account for interest payments that Tenor won't receive on its investment because of the early repayment....
