Remains of the Weinstein Company sold — to the only real bidder
The remains of the Weinstein Company, once a leading independent movie studio, are slated to be sold.
After no serious bids emerged ahead of the Monday deadline to submit for the company’s bankruptcy auction, the Dallas firm Lantern Entertainment is poised to buy the assets of the company for $310 million.
That’s nearly 40% less than was being offered for the company a few months ago, and just a fraction of how much the company was worth before the sexual misconduct scandal that toppled its founder Harvey Weinstein last year.
Lantern had entered a bid to get the auction process started. It is an arm of private equity firm Lantern Capital, whose holdings include such assets such as American Zinc Recycling and GoodBulk, a bulk cargo shipping line. Lantern Capital did not immediately respond to request for comment.
Private equity firms typically buy distressed companies for a fraction of their former value in an attempt to turn them around and resell them.
The Weinstein Company certainly qualifies as distressed. It filed for bankruptcy earlier this year after Harvey Weinstein was accused of years of sexual misconduct and harassment of women. He has denied claims of non-consensual sex.
Weinstein himself is gone, fired a matter of days after the allegations against him first surfaced in the press. The company still has some assets, including the rights to some of the award winning films it produced and distributed as well as some of the rights deals to films that are still in production.
Some of its partners in those films have filed in bankruptcy court seeking to invalidate those rights, though.
The relatively low price of the deal, and the financial problems at the company, have raised concerns among its creditors about whether they will get the money owed to them. Some have filed objections to the proposal to sell to Lantern at the $310 million price. Among the most recent objections were filings Monday by Actor Brad Pitt, who said he is still owed money from the 2012 Weinstein Company movie Killing Them Softly, and Heidi Klum, who said she is owed money from the television show Project Runway, which was produced by the company.
The company also faces a civil rights suit filed by New York Attorney General Eric Schneiderman based on allegations of sexual harassment of employees. Schneiderman is on record saying he wants to ensure than any sale includes a fund to compensate victims.
Harvey Weinstein told The Hollywood Reporter in 2016, a year before the scandal broke, that his company was worth $700 million to $800 million “in a worst case scenario.” But the scandal slashed that value significantly.
It had reached a deal in March to sell the company’s assets for $500 million to an investor group led by Maria Contreras-Sweet, who intended to have women take many of the top positions at the studio. But that deal fell apart when the buyers discovered the company was deeper in debt that they initially believed.
The Weinstein Company had been slated to go be auctioned on Friday to find the highest bidder for the company. But filings disclosed late Tuesday that Lantern was the only qualified bidder to have met the initial price set by the court, so the auction was canceled.
There were others interested in the company but they were not judged to be qualified bidders, according to the filing. Trade publication Variety reported Tuesday that Howard Kagan, a former partner at a hedge fund who has produced Broadway plays, is still trying to buy the company. But it is not clear that his bid will be considered. Attempts to reach the Weinstein Company were unsuccessful.
The approval of the bankruptcy court is still needed before the sale can close, and a hearing on that is scheduled for next week.