The U.S. Bankruptcy Court approved Digital Domain Media Group’s motion for relief from stay of Florida Department of Economic Opportunity (DEO) for (i) for determination that applications for tax credits are not property of the debtors’ estates or (ii), in the alternative, relief from the automatic stay to terminate non-vested tax credit applications.
As previously reported, “First, there can be no prejudice to the Debtors or their estates because, as shown above, the Debtors have not, and cannot, obtained final approval for any tax credits, and thus the Debtors’ estates have no interest in such credits. Therefore, permitting the DEO to cancel the Tax Credit Applications will not prejudice the Debtors or their estates in any way. Second, as also described above, the DEO suffers a hardship from continuing the stay, as the DEO is unable to accept new tax credit applications from other qualified applicants until the Debtors’ Tax Credit Applications have been cancelled, which deprives the State of Florida of the benefits the Program was designed to affect.”
Documents filed with the U.S. Bankruptcy Court continue, “Finally, the DEO has shown that it has more than a reasonable probability of succeeding on the merits, as no tax credits can be finally issued under the Program unless the applicant actually performs production in the State of Florida and makes qualified expenditures in the State of Florida, and to the DEO’s knowledge, the Debtors no longer conduct any operations or principal production in the State of Florida. Therefore, the Debtors are unable as a matter of law to obtain final approval and granting of any tax credits relating to the four Tax Credit Applications. For the reasons stated above, the DEO respectfully submits that the Tax Credit Applications, and any tax credits applied for there under, are not property of the Debtors’ estates, because no tax credits have actually been issued to the Debtors and it is impossible for the Debtors to comply with Program requirements since they have ceased operations in the State of Florida.” Read more about the DDMG Chapter 11 proceeding.