Digital Domain bankruptcy costs Florida governments $135 million

State, West Palm Beach and Port St. Lucie officials are faced with embarrassment following today’s announcement that the movie effects company Digital Domain Media Group is seeking Chapter 11 bankruptcy protection, according to the Palm Beach Post. In an attempt to boast local employment, the city of Port St. Lucie loaned the private company $7.5 million to help it meet its goal of hiring some 300 workers at an average salary of $65,000. “It appears now we won’t be able to collect that,” Ed Cunningham, a city spokesperson, said.

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Port St. Lucie’s other financial ties to the firm include a 130,000-square-foot headquarters and animation studio the city bankrolled, an additional $441,067 it gave the company to cover extra construction costs and a $40 million bond. The city of West Palm Beach gave $2 million to Digital Domain to found a school that is now on the verge of collapse. In total, Florida governments invested nearly $135 million in the company.

Digital Domain was valued at $400 million May 1, but as of today it is valued at a mere $15 million. Florida Governor Rick Scott has since ordered a probe into the state’s decision to invest in the company. [Palm Beach Post]Christopher Cameron