Weinstein Co. Bankruptcy Auction Pushed To May 4

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deadline.com/2018/04/weinstein-company-bankruptcy-auction-date-court-hearing-1202359857/

Weinstein Co. Bankruptcy Auction Pushed To May 4; Creditors Question Lantern Capital Bid At Hearing

UPDATED with more details: The bankruptcy auction for the sale of The Weinstein Company has been moved to May 4 from an original date of May 2, and creditors want stalking horse bidder Lantern Capital to explain how it values separate pieces of the company’s assets in its $425 million bid.

The news came Friday morning during a hearing in federal court in Wilmington, DE to discuss bidding procedures for the company. More than a dozen lawyers were present today, representing the creditors, The Weinstein Company and different assets and groups that are part of the sale, including Hotel Mumbai and the guilds for actors, writers and directors.

A lawyer for Hotel Mumbai, the film based on events surrounding the 2008 Pakistani terrorist attacks on the Taj Mahal Palace Hotel in India that stars Dev Patel and Armie Hammer, argued The Weinstein Company had no rights to the film and hadn’t received promised information from Lantern Capital about its plans with the movie.

There are 23 potential buyers for The Weinstein Company, according to its attorneys. Thirteen of them are financial buyers – similar to Lantern Capital, which has no previous experience in the entertainment industry – and 10 of them strategic buyers.

After creditors voiced their request for Lantern Capital to allocate their bid for the company’s assets, they met with Weinstein Company attorneys for a few minutes outside the courtroom. They agreed to postpone a decision until future hearings, at which the creditors reserved the right to push for the stalking horse to release their allocations again.

Other potential buyers must allocate their bids, assigning value to the film library, TV business and unreleased films portions of The Weinstein Company’s portfolio.

Robert Feinstein, an attorney for the creditors, said they were concerned about the sale bringing as high as possible a bid if the stalking horse didn’t have to allocate its value of the assets and other potential bidders did.

“It would be nice if we had the stalking horse bidder willing to allocate but they’re not,” he said. “We’ll just move forward.”

RelatedAs The Weinstein World Turns, Industry Asks: Who Is Lantern Asset Management?
The Weinstein Company’s assets include cash flows from a library of 277 feature films that have grossed more than $2 billion and garnered 28 Academy Awards and several unreleased movies and TV shows. The future of these unreleased properties is up in the air if they can’t get their rights back from TWC.

Earlier this week, representatives for Hotel Mumbai said in a filing they had rescinded an agreement with The Weinstein Company after the sexual assault allegations. “We don’t believe the debtors have any rights to the film,” an attorney for the movie said at today’s hearing.

He acknowledged arguments about who owns the film’s rights would likely need to be reserved for May 7, at the sale hearing following the auction.

The Weinstein Company agreed to spend $10 million to promote Hotel Mumbai and release it within a year after filming wrapped. The producers are concerned whether they’d receive a similar deal from whoever buys the company. The attorney for the movie claimed Lantern Capital had promised information on whether it could and had not provided it.

Other films and TV shows have been able to escape The Weinstein Company’s grip, including Lin Manuel-Miranda’s In the Heights.

On Tuesday, the U.S. Trustee overseeing the bankruptcy filed an objection against protections for Lantern Capital that would give it an advantage over other creditors in collecting fees because of a $9.3 million breakup fee and a reimbursement of up to $6.3 million in expenses. The Weinstein Company’s lawyers reiterated today the need for the breakup fee and reimbursement, saying Lantern Capital wouldn’t proceed without them.

The Weinstein Company filed for bankruptcy last month after a $500 million deal with billionaire Ron Burkle and Maria Contreras-Sweet collapsed. Lantern Capital’s $425 million bid includes $310 million in cash and $115 million for liabilities.

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variety.com/2018/film/news/weinstein-co-hearing-may-4-1202745864/

Weinstein Co. Auction Set for May 4, Bidder’s Breakup Fee Reduced

The Weinstein Co. has agreed to postpone its bankruptcy auction date by two days in order to give creditors more time to evaluate the bids.

At a hearing on Friday, a Delaware bankruptcy judge agreed to schedule the auction for May 4, instead of the original date of May 2. A hearing to confirm the sale was set for May 8, a postponement of four days.

A committee of unsecured creditors — which represents victims of Weinstein’s sexual abuses — had raised concerns about the speed of the sale, saying it could result in a sale for less than the company’s maximum value. At the hearing, Weinstein Co. attorney Paul Zumbro emphasized that a timely transaction is important to maintain the value of the company.

“We need to move quickly in order to preserve our client’s rights and business relationships,” Zumbro said.

The company modified its bid procedures to address other objections raised by interested parties. The U.S. bankruptcy trustee raised concerns about a $15.5 million breakup fee for Lantern Capital, the stalking horse bidder. The fee would be paid to Lantern, a Dallas-based private equity firm, if it does not emerge as the winning bidder.

The trustee objected to the “superpriority” status of the fee — meaning that Lantern would be paid ahead of all other claimants. The Weinstein Co. agreed to reduce the status to “administrative” priority. The creditors’ committee also raised concerns about the amount of the fee. Lantern also consented to cutting the fee to $14 million.

Attorneys for the Weinstein Co. painted a portrait of an indie studio with a lot of potential new owners. Zumbro said that the studio has identified 23 potential buyers and plans to try to drum up interest in advance of the sale. It’s unclear, however, if these would-be buyers are serious in their interest. Of them, only 14 have accessed a data room with financial information about the Weinstein Co. and only three have sent inquiries.

Lantern Capital has offered to buy the company for $310 million cash and the assumption of debt.

An attorney for the guilds, which represent filmmakers and actors who have worked with the Weinstein Co., said they want to ensure that any buyer has the financial means to pay post-sale residuals. A lawyer for the producers of “Hotel Mumbai,” an unreleased Weinstein Co. thriller, also said that his client needed assurances that the stalking horse bidder had the ability to spend an agreed-upon $10 million to promote and release the film. The producers have not received information about Lantern.

The Weinstein Co. has been teetering on the edge of insolvency after news broke that its founder, Harvey Weinstein, had allegedly assaulted or harassed dozens of actresses. Weinstein was fired within days of reports breaking, but the company’s reputation was effectively in tatters. At one point, the studio had a deal in place to sell itself to a group of investors led by billionaire Ron Burkle and former Small Business Administration head Maria Contreras-Sweet, but it collapsed when it was discovered that the studio was carrying more debt than had previously been disclosed.