Judge approves revised Weinstein Co. bankruptcy sale plan
WILMINGTON, Del. (AP) — A Delaware judge on Wednesday approved a revised plan for the sale of the Weinstein Co., the studio forced into bankruptcy by the sexual misconduct scandal that brought down Hollywood mogul Harvey Weinstein.
The revised plan calls for Dallas-based private equity firm Lantern Capital to pay $289 million for the Weinstein Co.’s assets, down from an initial sale price of $310 million.
Attorneys negotiated the $21 million price reduction after disputes threatened to torpedo the deal. Among those concerns was who would be responsible for paying potentially tens of millions of dollars owed on certain contracts that may be assigned to Lantern.
As part of the settlement, Lantern agreed to pay at least $8.75 million to satisfy certain contractual claims and pay for the Weinstein Co.’s operating expenses since June 29 in exchange for a lower purchase price.
The sale is expected to close Friday, but claims asserted by several Hollywood stars who say they are owed royalties and profit participation payments from various film and television projects will be resolved later.
The sale agreement allows Lantern up to 120 days after closing to decide whether to assume or reject existing Weinstein Co. contracts. A hearing on that issue is scheduled for next Wednesday.
“There will be a number of hearings over the course of the summer to address those issues,” said Lantern attorney Meredith Lahaie, who noted that Lantern was reviewing about 24,000 contracts.
Weinstein Co. attorneys said an important factor in deciding to amend the sale agreement was the need to ensure closing before the company’s bankruptcy financing and Lantern’s debt financing commitment expired.
The Weinstein Co.’s primary assets include a library of 277 feature films that have generated more than $2 billion in aggregate box office receipts worldwide, a television production business, and an unreleased film portfolio that includes four distribution-ready films and other projects in various stages of development.
“It has been a long and rocky road since we filed these cases. … This has been a difficult company to sell, but we are confident that we have the best deal in hand,” Weinstein Co. attorney Paul Zumbro told Judge Christopher Sontchi.
An attorney for the company’s official committee of unsecured creditors, a group that includes women who have accused Harvey Weinstein of sexual abuse and harassment, said the settlement was the result of intense negotiations. Those negotiations included the committee successfully arguing that the sale price should be lowered by $21 million, not the initially agreed-upon $23 million. Certain Weinstein Co. financial advisers also agreed to reduce their fees by $1 million.
“The committee is still not happy but has to be practical,” said attorney Robert Feinstein. “The sale has to close.”
Judge Sontchi noted that while some people might get caught up in Hollywood star power involved in the Weinstein bankruptcy, the case was a very serious one about “terrible things that were done to people.”
“I’m very aware of the importance of that,” said Sontchi, who presided over the case of the Catholic Diocese of Wilmington, which sought bankruptcy protection in 2009 after failed settlement negotiations with alleged victims of clergy sexual abuse.
The Weinstein Co. sought bankruptcy protection in March amid a sexual misconduct scandal that brought down co-founder Harvey Weinstein and triggered a nationwide movement to address predatory sexual behavior and harassment in the workplace.
Last month, a Delaware bankruptcy judge ruled that six women who have accused Harvey Weinstein of sexual misconduct can proceed with their class action lawsuit alleging that the Weinstein Co. concealed widespread sexual harassment and assaults.
Harvey Weinstein, who has been indicted on criminal charges involving three women, has denied all allegations of nonconsensual sex.
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