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No sooner had Lantern Capital closed its deal to buy The Weinstein Co. for $289 million than did Ron Burkle’s Yucaipa Companies file a lawsuit in Los Angeles Superior Court on Monday accusing the Texas-based company of alleged fraud and breach of contract related to the sale.
Yucaipa and Lantern, along with former Obama administration official Maria Contreras-Sweet, were originally partners in a bid to buy TWC, but that bid ultimately fell by the wayside.
Lantern, based in Texas, next became a stalking horse bidder to buy assets of the company out of bankruptcy. The deal, approved last week by a judge in Delaware, was finalized on Monday.
In the lawsuit, Burkle’s company alleges that Lantern had entered into a written agreement stating it wouldn’t use confidential TWC information compiled by Yupaipa without Yucaipa’s consent. That agreement was signed last fall, when they were working together to acquire Harvey Weinstein’s ailing film and television production venture.
Later, according to the complaint, the two parties struck an oral agreement whereby Lantern could use the information in its pursuit of the stalking horse bid if it agreed to compensate Yucaipa via a two percent transaction fee. The lawsuit alleges that Lantern later breached that agreement, including informing Yucaipa that it wouldn’t honor the arrangement.
Burkle had a close relationship with Weinstein and his company for years. As detailed in the lawsuit, Burkle’s company invested in at least a dozen TWC films, including The Iron Lady, Long Walk to Freedom, August, Osage County and Crouching Tiger, Hidden Dragon.
The suit seeks unspecified damages. Yucaipa is represented in the matter by Loeb & Loeb.
A Lantern spokesperson said the company does not comment on litigation.
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