- Associated Press - Tuesday, May 31, 2016

TALLAHASSEE, Fla. (AP) - Florida will only get back a small portion of the millions it invested in a failed visual effects film studio whose high-profile bankruptcy was used in the contentious 2014 election between Gov. Rick Scott and Charlie Crist.

State and local governments in April reached a settlement in a complicated legal battle that involved filings in bankruptcy court as a well as a civil lawsuit filed in St. Lucie County. A bankruptcy judge approved the settlement earlier this month and the payments are expected to be made over the summer.

The state in 2009 agreed to invest $20 million with Digital Domain, which had promised to create about 500 jobs at a Port St. Lucie animation studio and a West Palm Beach film school. But the company filed for bankruptcy in 2012.

Florida sued Digital Domain at the direction of Scott, whose re-election campaign mentioned the lawsuit in a TV ad critical of Crist since the former governor had signed off on the initial deal to help the company.

Under the settlement, which was first reported by TCPalm.com, Florida will receive an estimated $5 million, but only about $3 million is expected go back to taxpayers. That’s because lawyers hired by the Scott administration were entitled to 25 percent of any money won by the state. Other court costs and fees also need to be paid off, according to Erin Gillespie, a spokeswoman for the Department of Economic Opportunity.

During the more than two-year-old legal fight, Florida has also gotten back the rights to $20 million in film production tax credits that were initially pledged to Digital Domain.

“The bottom line is that we got the state back money they never thought they would get,” said William Scherer, the Fort Lauderdale attorney who led the legal battle for the state.

While Florida’s lawsuit contended the initial deal to benefit Digital Domain was a “de facto Ponzi scheme” Scott’s own inspector general concluded that no laws were broken.

Cissy Proctor, the executive director of the Florida Department of Economic Opportunity, said in a statement that the state has restructured its incentive program to “ensure a deal like this doesn’t happen again.”

The demise of Digital Domain has been constantly cited by critics of Florida’s incentives program. State legislators this year rejected a proposal by Scott to set aside $250 million for business incentives.


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