The company had been suffering from what it called an “acute liquidity shortage” and its bank had been unable to fully meet the terms of a financial loan.
“Reorganisation”, which was granted by a local district court on 9 October, gives the company three months to address its problems and reach settlements with creditors. An administrator has also been appointed. During this period third parties cannot apply for a bankruptcy order.
Digital Vision put the need for reorganisation down to slow sales following the US writers' strike earlier this year.
“The reasons are the lack of liquidity due to a significant slowdown in sales during 2008,” a statement explained. “However, the board believes that there are good opportunities to achieve long-term profitability. It is foremost the writers' strike in Hollywood earlier this year that is behind the declining sales trend.
“Several production companies in Europe were adversely affected resulting in reduced demand for products. Many bankruptcies among these companies also increased the availability of used products on the market, which affected sales.”
As a result of the company's liquidity problems the Digital Vision board asked chief
executive Lars Taflin to resign, stating that he “no longer had the confidence of the board”.
Chairman Gert Schyborger has been appointed as interim chief executive. No redundancies are expected at this stage.