The producers, OddLot Entertainment (OLE) and Ender's Game Holdings (with Lionsgate via Summit Entertainment), contacted DDMG immediately after the bankruptcy filing to negotiate the situation and possibly reach a settlement, but according to the document "extensive negotiations" were "ultimately unsuccessful" as the producers learned at the court hearing last Thursday (September 20) that Digital Domain was "unwilling to go forward with the negotiated settlement." (PDF 2, page 2-3)
OLE sees Digital Domain's situation as pretty much hopeless. The court document states that DDMG has "no reasonable chance of reorganizing," and that the only reason the bankruptcy case was filed was to "effect an extremely expedited sale process followed by a liquidation." (PDF 1, page 11) OLE also believes that Digital Domain is "in no position to finish production under the Ender's Game Agreements," and therefore immediate action is necessary to protect the film.
In U.S. bankruptcy law a so-called "Automatic Stay", an automatic injunction that halts certain actions by creditors such as collecting debt in a declared bankruptcy, currently prevents the producers from moving forward. OddLot Entertainment and production partners petitioned the court to schedule a hearing tomorrow (September 24) at noon ET for granting them relief from the Automatic Stay. If granted, they plan to exercise the following steps: (PDF 1, page 8)
1. taking immediate possession of the Ender's Game PropertyThose steps would be necessary because "films such as Ender's Game have carefully selected release dates, such that any actual or threatened interruption to the delivery of work product by [Digital Domain] would have potentially devastating and certainly very costly financial impact. Any delays in the production of Ender's Game will cause significant and irreparable harm. ... [Digital Domain's] current status presents a substantial risk, if not likelihood, that such delays will materialize very shortly." (PDF 1, page 7)
2. moving the visual, digital and animation effects for Ender's Game to another provider
3. accessing any of [Digital Domain's] technology necessary to finish the production of Ender's Game.
The whole situation looks pretty dire, however, OLE concludes that "if [...] the visual, digital and animation effects for Ender's Game are transferred to another provider in a timely and orderly manner, [the producers] may still have the ability to complete Ender's Game on schedule." (PDF 1, page 14)
My take on this, and what it means for Ender's Game:Those court documents express the views of Ender's Game Holdings and OLE who naturally have an interest in regaining complete control over the film as quickly as possible. The court doesn't necessarily have to follow the producers' assessment. However, certain statements made in the filings, such as DDMG having "no reasonable chance of reorganizing," and being "in no position to finish production," are worded so strongly that I would consider them factual, especially as they are presented to the court.
It now seems very likely that the special effects work on Ender's Game will be moved to another VFX studio, which will ultimately cause delays in post-production of the film. This is supported by OLE's conclusion that they "may still have the ability to complete Ender's Game on schedule" if everything works out smoothly, which effectively means that the November 1, 2013 release date is now at risk, no matter the outcome of Monday's court hearing.
Ender News will be keeping you updated on any new developments in this mess of a bankruptcy case related to our beloved Ender's Game franchise.
Update: Chinese-Indian JV to buy Digital Domain