Zoe Saldana, Sam Worthington, Avatar

20th Century Fox

How can James Cameron's special effects company be bankrupt if all his movies make so much money? How will the bankruptcy affect the Avatar series?
—Queen of Queens, via Facebook

Indeed, how could a company not only cofounded by the King of the World, but also the great minds behind the overhyped Tupac Shakur "hologram," possibly lose money? Well, um, the way any other company does: Digital Domain reportedly filed for Chapter 11 protection with only $50,000 in the bank...despite the fact that Cameron alone is worth hundreds of millions of dollars.

So, you ask, how can this happen? And can these folks continue to give us a planet's worth of blue, penis-tailed creatures for years to come?

First of all, know this: Bankruptcy has affected plenty of Hollywood businesses, regardless of how rich their founders were. (And I mean were: Digital Domain is now a public company,  and these days, Cameron is nowhere near one of the company's biggest shareholders.) Most often, in the end, not much changes. MGM's bankruptcy was blamed as one of the reasons it took so long to settle on a director for The Hobbit, the first part of which is nonetheless debuting in December.

As for Digital Domain's slate, some productions have already been affected. Its animated feature The Legend of Tembo, has been left in limbo. But the company's other operations, hard at work on stuff like the big-screen adaptation of Ender's Game and the latest installment of the G.I. Joe franchise, are, the company has said, still up and running. (Look for Ender's Game to debut on time late next year.)

"They're going to continue to function," predicts Kevin Toole, a senior associate with in the bankruptcy division at the law firm Thaler Gertler, which is not involved in the company.

He notes that Digital Domain has some friends in high places—companies that are supporting the special effects house until it can sell itself off.

"The funding has to be approved by the bankruptcy court, but its pretty normal for this kind of funding to happen."

You also asked about Avatar. You should also know that Digital Domain, while responsible for the SFX in franchises like Pirates of the Caribbean and Transformers, is not credited as being the main force behind Avatar's look. Weirdly enough, that honor largely belongs to a company called Prime Focus, which—see if you can keep up—is reportedly thinking about putting in a bid to buy the troubled Digital Domain. (Digital Domain already has other suitors in the mix.)

By the time Avatar 2 and 3 come out—and they're gonna come out—we just might have one big special-effects juggernaut handling the visuals.

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