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Jan 8, 2016

DigitalSound Production Services, Inc. Completes Speedy “Free and Clear” Sale of Substantially All of its Assets; Expecting 100% Recovery for Creditors

FOR IMMEDIATE RELEASE

DigitalSound Production Services, Inc. Completes Speedy “Free and Clear” Sale of Substantially All of its Assets; Expecting 100% Recovery for Creditors

Los Angeles, CA – January 8, 2016 – A mere 35 days after filing its voluntary chapter 11 case, DigitalSound Production Services, Inc. (“DPS”) has closed on the sale of substantially all of its assets “free and clear” of any and all claims and interests, except for those explicitly assumed, pursuant to Section 363 of the Bankruptcy Code, in its chapter 11 case pending in the U.S. Bankruptcy Court for the Central District of California, San Fernando Valley Division as Case No. 1:15-bk-13952-MB (“Bankruptcy Court”).

The company received consideration in excess of $6 million, inclusive of cash plus the assumption of certain specified liabilities. Additionally, a majority of DPS’s employees were offered new employment opportunities. Significantly, the company announced that it anticipates paying its creditors 100% of the amount of their allowed claims.

DPS was a leading full-service lighting and sound production company, offering premium quality lighting, sound, video, staging equipment, and sound solutions for A-list concerts, live shows, and a wide variety of other events and productions.

Pre-bankruptcy shareholder litigation caused the company to experience business disruptions in addition to its existing monthly losses of hundreds of thousands of dollars. The litigation also led to the appointment of a provisional director with expanded powers to sell the company; seasoned financial restructuring expert Charles Klaus was appointed pursuant to an agreement of the parties to lead the company’s financial restructuring.

The bankruptcy auction was held on December 22, 2015, at which the “stalking horse bidder” Atomic Lighting LLC (“Stalking Horse Bidder”) was overbid by two separate buyers who participated jointly in the auction, Video Equipment Rentals (“VER”) and Production Resource Group L.L.C. (“PRG”), who together were declared the winning bidder.

The chapter 11 bankruptcy case was filed on December 1, 2015. Bankruptcy Court judge Martin R. Barash entered the order approving the sale on Christmas Eve. The sale closed on January 5, 2016.

The advisors who guided DPS’s financial restructuring included bankruptcy counsel Steven T. Gubner, Susan Seflin and Jerrold L. Bregman of Brutzkus Gubner Rozansky Seror Weber LLP in Woodland Hills, CA, and DPS’s general counsel Ara A. Babaian of Encore Law Group in Los Angeles, CA. DPS’s minority shareholder was represented by Robert Huttenhoff and James C. Bastian, Jr. of Shulman Hodges & Bastian LLP in Irvine, CA.

The Stalking Horse Bidder was represented in this matter by Mark E. Felger of Cozen O’Connor in Wilmington, DE.

VER was represented in this matter by Hamid R. Rafatjoo and Ronn S. Davids of Venable LLP in Los Angeles, CA. PRG was represented in this matter by Lewis R. Landau, Esq. of Calabasas, CA and by PRG’s General Counsel, Robert Manners in Armonk, New York.

Upon closing, lawyer Steven Gubner remarked: “Chuck Klaus’s leadership, creativity, and strong decision making made this hurry-up restructuring possible for the benefit of creditors. It was a privilege to be part of Chuck’s team.”

CEO Klaus proclaimed: “We are very pleased that most of the company’s employees were offered jobs, and we expect the sales proceeds will allow us to pay all allowed claims in full. I especially want to thank the company’s numbers man, Greg Schroeder, and our chief bankruptcy lawyer, Susie Seflin, who did an outstanding job in a time-compressed environment.”

About the Law Firms:

Brutzkus Gubner (www.bg.law) is a full service business law firm that advises debtor companies, creditors’ committees, secured and unsecured creditors, financial institutions, equity owners and investors, trustees, liquidators and court-appointed fiduciaries, in all types of restructuring and insolvency matters both in and out of court, in addition to general corporate, commercial litigation, intellectual property, real estate, finance, and related matters.

Encore Law Group (www.encorelaw.com) is a business law firm providing sophisticated and streamlined legal counsel in a diverse array of transactions and other business legal matters.

Law Offices of Lewis R. Landau is a bankruptcy law firm representing companies and individuals. Landau is a certified specialist in bankruptcy law by the California board of legal specialization.

Cozen O’Connor (www.cozen.com) is full-service international law firm with nationally recognized practices in litigation, business law, and government relations.

Shulman Hodges & Bastian LLP (www.shbllp.com) is a business law firm focusing its practice in the areas of business organization and transaction, litigation, reorganization and insolvency, real estate, and estate planning.

Production Resource Group (www.prg.com) is the world’s leading provider of entertainment and event technology solutions, PRG provides integrated services and equipment, including audio, video, lighting, rigging, staging, and scenery and automation systems, for these markets from more than 40 offices in North America, South America, Europe, Middle East, Asia, and Australia.

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