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Clearing a final hurdle, The Weinstein Co. has reached an agreement with its unsecured creditors, allowing Lantern Capital to buy the company in bankruptcy. Sources say the agreement was made Thursday night.
TWC had agreed to reduce the sale price from $310 million to $287 million ahead of the two companies meeting in Delaware bankruptcy court next week. The sale price is now $289 million.
As part of the agreement, TWC’s financial advisers have agreed to reduce their fees relating to the transaction by $1 million. The resolution also includes, among other things, Lantern’s agreement to make numerous cure payments for contracts it is assuming in the sale — an issue that was important in resolving the concerns of unsecured creditors.
“Today’s resolution not only avoids the expense and risk of litigation, but also ensures all creditors certainty that the sale will close. We are delighted that today’s agreement clears the path for this sale to close. Lantern represents the highest and best value to creditors after the competitive bidding process,” said Robert Del Genio, chief restructuring officer of The Weinstein Company. “We thank Lantern and the UCC for their constructive approach to achieving deal certainty.”
The move pulls the deal back from the brink. In recent days, an agreement seemed iffy, with the two sides unable to come to terms on who would be on the hook for certain lawsuits in motion. But all along, insiders were confident that the deal would close and stressed that it was just taking longer than usual.
In March, Lantern became the stalking horse bidder as TWC plunged into bankruptcy, a dramatic turn for the company founded by brothers Harvey and Bob Weinstein, the former who was facing dozens of allegations of sexual assault and misconduct. Harvey Weinstein has since been arrested and is out on bail as he mounts a defense in multiple cases of rape in New York. Lantern was originally part of group that included billionaire Ron Burkle and bid on TWC in a non-bankruptcy scenario. But that deal fell apart when the New York Attorney General’s Office blocked the sale in the 11th hour over concerns that the deal would benefit TWC executives who had been complicit in Weinstein’s alleged behavior, including COO David Glasser. Burkle now is said to be involved in a new company soon to be launched by Glasser.
“This collective resolution affirms our commitment to closing the transaction,” said Lantern Entertainment co-presidents Andy Mitchell and Milos Brajovic. “This significant milestone is a very productive and positive step, and we are grateful to be part of the solution.”
The sale is expected to close next week, subject to approval of the bankruptcy court.
“Lantern has been steadfast in its dedication to consummate this sale as a going concern, with our employees and assets as the core of its business and with Lantern’s commitment to diversity and respect for all,” TWC’s board of representatives said in a statement. “We wish Lantern all the best as they embark on the exciting challenge of revitalizing these valuable assets.”
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