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Harvey Weinstein is in prison, but his presence in showbiz lingers. Next up could be a high-stakes trial that focuses on the months following the revelation in 2017 of his monstrous behavior toward women. That was when Weinstein’s film and television company went into a tailspin, and observers wondered if any investor would step up to salvage it and whether Weinstein victims would be compensated accordingly.
In October 2017, Ron Burkle, the supermarket billionaire, reportedly had strong interest in acquiring The Weinstein Co. It didn’t happen. As more and more Harvey Weinstein accusers came forward and as the New York attorney general got involved, TWC declared Chapter 11. Months into the bankruptcy proceedings, the company’s main assets — including a library of 270 films — were sold to Dallas-based private equity firm Lantern Capital for $289 million. The transaction is now being questioned in a breach of contract suit filed by Burkle’s Yucaipa Cos.
Lantern had no prior dealings in Hollywood, and according to the complaint filed in Los Angeles, after learning of Burkle’s interest, Lantern managing partner Andy Mitchell reached out to the billionaire in November 2017 to be a part of the deal. Lantern signed a nondisclosure agreement and got access to information and relationships that Burkle believes ultimately proved fruitful. Burkle now says that pursuant to an oral promise from the Texas investors, his company is entitled to a finder’s fee (2 percent of the transaction, about $6 million), an opportunity to invest up to $50 million in the new venture — ultimately named Spyglass Media Group, run by former MGM chief Gary Barber — plus other considerations.
Lantern argues the NDA is the only conclusive agreement between the parties. If it were really true that the sides later agreed that Lantern would lead the TWC buyout instead of Yucaipa and that the latter would get an equity interest, that would have modified the original arrangement for secrecy. “Such changes would trigger the requirement to put them in writing,” Lantern’s attorneys say.
Burkle’s lawyers have responded, “If any of this were the law, why would anyone enter into an NDA, exchange confidential information, engage in negotiations and eventually reach agreements — when everything is legally void or illusory?” Accepting such a “highly unusual argument,” Burkle’s side adds, “would undermine scores of contracts, upend routine business practices and likely astonish Lantern itself because if applied, it would nullify numerous agreements.”
On Nov. 2, an L.A. judge will convene a hearing on this matter and decide whether a trial is appropriate.
This story appeared in the Oct. 27 issue of The Hollywood Reporter magazine. Click here to subscribe.
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