North Bay Business Journal

Friday, April 8, 2011, 2:08 pm

Kerner Optical files for Chapter 11 reorganization


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    SAN RAFAEL — Kerner Optical LLC, once the cover name for Lucasfilm’s Industrial Light & Magic division, has filed for Chapter 11 reorganization with U.S. Bankruptcy Court in Santa Rosa.

    Kerner Optical, the contract provider of movie special effects for Lucas films, commercial film makers and event producers listed assets of $799,000 and debts of about $4.25 million in its court filing.

    Kerner Optical was the ghost name by which ILM operated in stealth before Lucasfilm moved the division and most of its operations to the Presidio in San Francisco in 2006.

    The special-effects team, responsible for building models and creatures and creating pyrotechnical effects, elected not to make the move.

    Kerner Optical is not connected to The Kerner Group, an umbrella over Kerner Studios, KernerWorks, Kerner Pictures and Kerner 3D.

    Led initially by Mark Anderson, Kerner Optical spawned several divisions — Kerner Research and Development, Kerner Music and Media, and Kerner Mobile. It occupied a 160,000-square-foot facility and sound stage on Kerner Boulevard, providing special effects for filmmakers.

    Following a few rough years, the company briefly closed before being taken over by a new group of owners led by the managing partner Eric Edmeades.

    “The original owners were talented artists and technicians rather than businessmen,” said Mr. Edmeades, explaining the closure.

    Other causes, he said, were the 2007-’08 Writers Guild of America strike and a threatened strike by actors, both of which severely slowed the industry.

    The new owners struggled for a couple of years to turn the company around.

    “We found it would take more than an infusion of cash to fix Kerner Optical,” Mr. Edmeades said. “The company really requires reorganization.”

    Although reluctant to say when Kerner Optical may emerge from Chapter 11, he’s optimistic about its future.

    “Our last quarter was actually one of our strongest,” he said.

    The company currently employs a core of about 15, with 60 to 70 workers coming on during projects. The company has reduced its space to half what it occupied.

    Kerner Research and Development, Kerner Music and Media, and Kerner Mobile are no longer operating, according to Mr. Edmeades.

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