Effects Co. Investor Can Challenge $70M Bankruptcy Claim

Law360, Wilmington (November 27, 2012, 6:39 PM EST) -- A Delaware bankruptcy judge on Tuesday granted a private equity backer of Digital Domain Media Group Inc. standing to challenge a $70 million claim from the special-effects shop's senior noteholders, which the investor says was bloated by an unlawful default penalty.

Florida-based private equity firm Palm Beach Capital — DDMG’s largest shareholder with a 37 percent stake — requested permission last month to sue the noteholders on behalf of DDMG, arguing that nearly $25 million of their bankruptcy claim should be disallowed because it stems from...
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