Weinstein Co. Sale to Lantern at Risk Amid Growing Discord
As the parties argue over terms owed creditors, the clock is ticking.
The sale of The Weinstein Co. to private equity group Lantern Capital is in danger of falling apart, TWC said Wednesday in a filing with the U.S. Bankruptcy Court in the District of Delaware.
The sale was originally approved in May, and while the sale price was subsequently reduced from $310 million to $287 million, the parties are now threatening to sue each other as they argue over the millions in profit participant payments owed to various creditors.
The TWC lawyers are charging that Lantern has breached the agreement by failing to close the sale within the time permitted, while Lantern has accused TWC of misrepresenting the payments that are due, and the two sides are now threatening to sue each other.
“The Parties’ disputes have come to a head at a perilous time for the Debtors,” the filing reads, with TWC running out of financing and a DIP facility due to mature on July 23, and Lantern’s own debt financing commitment terminating on July 15.
A failure to close the sale, the filing warns, could result in liquidating the company.
Wednesday's filing isn't specific as to who is owed what, but behind the scenes celebrities and their attorneys have been trying to figure out who will pay them money they say they are owed. Robert De Niro, for example, could be owed about $940,000 for work in the 2012 film Silver Linings Playbook.
Others that may be owed money for various projects include George Clooney, Brad Pitt, Meryl Streep, Jennifer Lawrence, Quentin Tarantino and Bradley Cooper.
Presumably, the $23 million reduction in price will protect Lantern should it have to pay these and other actors, as well as if it has to pay unspecified other debts that are owed by TWC.
While TWC's attorneys already said last week that it had agreed to Lantern's lowered price, Wednesday's filing makes it clear how fragile the situation is and that if a judge does not allow the new amendments to the sale to be adopted quickly, the whole transaction could be called off.
The lowered price "is necessary to resolve an ongoing dispute with Lantern that poses great risk to the estate in circumstances where the Debtors are running out of time, liquidity and options," according the filing.
"Although the Debtors wish there were another option to ensure the consummation of this sale, there is not," the filing continued. "The Debtors have agreed to this settlement because it is in the best interests of the estate and the creditors to close the sale."