Bids came due for the bankrupt Weinstein Co on Monday, setting the stage for what could be a tepid auction for the company co-founded by disgraced independent film mogul Harvey Weinstein.
The bidding process has attracted interest from a handful of companies, including hedge funds interested in the studio’s library and other assets. But it’s unclear whether any bidders will top the so-called stalking horse offer made by Dallas-based private equity firm Lantern Capital Partners in March.
There appears to be scant interest among obvious potential buyers, reflecting the battered state of the once high-flying studio. Lionsgate, Metro-Goldwyn-Mayer and Miramax — the studio formerly owned by the Weinstein brothers — were among those that did not submit bids for the New York studio’s assets, according to people familiar with the matter who were not authorised to comment.
Weinstein Co declined to comment.
A dearth of competitive offers would be an anticlimactic outcome for Weinstein Co after attorneys told the US Bankruptcy Court judge in Delaware that the auction had attracted dozens of potential bidders. Weinstein Co and its creditors were hoping a bidding war would drive up the sale price.
“The whole idea is to get to an auction,” said Robert Marticello, a Costa Mesa-based attorney at Smiley Wang-Ekvall, who has worked on bankruptcy sales and is not involved in the Weinstein Co case. “Once you get everyone around the table for an auction, that will drive up the value.”
The auction comes about seven months after dozens of sexual assault and harassment allegations against Harvey Weinstein sent the studio into a tailspin. Weinstein Co, known for The King’s Speech and Django Unchained, filed for Chapter 11 bankruptcy protection March 19 after negotiations to sell to billionaire Ron Burkle and former Obama official Maria Contreras-Sweet collapsed.
The studio filed for bankruptcy with less than $500,000 (Dh1.8 million) in cash and hundreds of millions of dollars in liabilities owed to creditors, including Union Bank and Len Blavatnik’s Access Industries.
Weinstein, who launched the studio in 2005 with his brother, Bob, has denied all allegations of nonconsensual sex.
Lantern appears to be the only bidder interested in keeping the company intact post-bankruptcy. The firm has spoken to possible executives and met with movie and TV producers to help revive the studio, said one person familiar with the process.
Lantern, which was a minority backer of the failed bid from Burkle and Contreras-Sweet, offered $310 million in cash for the company. If no other bids emerge, Lantern would acquire the assets and assume about $115 million in liabilities related to certain film and television projects.
Any sale must be approved by a Bankruptcy Court judge. If the company receives other qualified bids, an auction will take place on Friday in New York followed by a sale hearing May 8.
New York Attorney General Eric Schneiderman, who sued the company and its co-founders when it was on the verge of a deal in February, wrote an open letter to all parties involved in the bidding process, urging them to compensate Weinstein’s accusers. Schneiderman’s civil rights lawsuit against the company and the Weinstein brothers is ongoing.
Weinstein Co has been badly bruised by the slide into bankruptcy. It sold the rights to movies such as Six Billion Dollar Man and the Robert De Niro comedy War With Grandpa in order to preserve the business. By March, its workforce shrank to 85 full-time employees from the 120 people the studio employed as recently as October, when the New York Times and the New Yorker published their Weinstein exposes.
Adding to the woes, celebrities including Brad Pitt and Heidi Klum filed objections in Bankruptcy Court on Monday, saying they haven’t been paid money they’re owed under contracts with the studio.
Blavatnik’s Access Industries has said it plans to submit a credit bid for foreign film distribution rights, according to court documents. Weinstein Co’s unsecured creditors last week objected to that plan because such a bid could benefit Harvey Weinstein, who personally guaranteed a loan from Access.
