page_title: Kerner Optical
section_title: History
hierarchical_section_title: Kerner Optical / History
caption_attribution_description: English: Picture of Kerner Co. sign in front of Kerner Optical (previously ILM)
context_page_description: Kerner Optical was an American practical visual effects company based in San Rafael, California.
  Originally the practical effects division of Industrial Light & Magic, it was spun off as an autonomous company in 2006. After five years of operating independently, Kerner declared bankruptcy and ceased operations in 2011.
context_section_description: Kerner's history dates to George Lucas's founding of Industrial Light and Magic. In the late 1970s, ILM moved to facilities in San Rafael, California, on Kerner Boulevard; the sign outside the building identified it as the Kerner Company. The company hid in plain sight and was known to locals, industry insiders, clients and suppliers as Kerner. George Lucas explained that the name Kerner was a "deception designed to keep kids from rummaging through garbage bins".
  In 2006, the practical effects department was, like Pixar in 1986, spun off from Industrial Light & Magic. When George Lucas moved the computer graphics team to The Presidio in 2006 he sold five physical effects divisions of ILM in a management-led buyout that resulted in the creation of a new company that took on the name Kerner Optical as a tribute to the long history shared with ILM. Kerner continued to operate in the same property, in San Rafael, from which they had operated for over 30 years and the original "Kerner Co." sign is still displayed in front of the building.
  In the three years since leaving the Lucasfilm family, Kerner continued to provide practical special effects to major film productions.
  In addition to films, Kerner was selected in 2007 to build a three-dimensional scale model of the Disneyland Park in Anaheim, California for the Walt Disney Family Museum. Named the "Disneyland of Walt's Imagination," the model is displayed at Gallery 9 of the museum, which is located in the Presidio, not far from the extant ILM headquarters.
  Kerner also continued several years of significant research and development in the areas of 3D camera rigs and consumer products. Kerner's creature shop manufactured lifelike, servo-controlled dummies with simulated injuries used for training military medics.
  In August 2009, entrepreneur Eric Edmeades acquired a controlling interest in the business and became CEO of the group. In February 2011, Kerner filed for Chapter 11 bankruptcy protection in San Francisco. Despite record profitability during reorganization, investor and previous owner Kevin Duncan of Duncan Oil appealed to the courts to have Eric Edmeades replaced by a trustee, alleging mismanagement. Duncan was also an owner and member of the management team for each of the first three loss-making years during which the company incurred millions of dollars in debt. Duncan's petition forced the company to turn away at least two ILM contracts and ultimately, despite Edmeades having enough creditor votes to approve his reorganization plan, led to the closure of the company seven months after the original Chapter 11 filing. After refiling their bankruptcy under Chapter 7, the court ordered liquidation of their assets.
caption: The Kerner Co. sign