Open Road Bankruptcy: Auction Called Off; Raven Capital Set to Acquire 'Spotlight' Studio

There was no qualified bid past the $87.5 million offered by the stalking horse bidder.
Courtesy of Kerr Hayes/Venice Film Festival

Open Road will soon be sold to Raven Capital Management for $87.5 million. An auction for the film company's assets was scheduled for Wednesday, but after no one submitted a qualified bid that bested stalking horse Raven, Open Road informed a Delaware bankruptcy court Monday night that it would be canceling the auction and taking the sale agreement with Raven.

The debtor declared Chapter 11 bankruptcy in early September amid mounting debt. Open Road, which belonged to U.S.-China broker Donald Tang, owns a film library that includes such notable works as Oscar-winner Spotlight, Side Effects and Nightcrawler. At the time of the bankruptcy filing, the company was coming off the box-office bomb Hotel Artemis and was also struggling to release the Johnny Depp film City of Lies amid lawsuits and at least $90 million owed to Bank of America.

When the stalking horse agreement was announced, attorneys for Open Road stated that there were 11 companies with interest in bidding, but further interest hasn't materialized.

As a result, Raven Capital Management will acquire Open Road's assets pending approval by the judge.

In recent years, the New York-based investment firm has quietly built a solid library of titles. 

According to a declaration submitted Friday where Raven sought to offer adequate assurance it would be able to perform contractual obligations, Raven nodded to the acquisition of Exclusive Media Group from a Dutch-based investment fund in 2015. That deal gave the company rights to approximately 400 titles, including Cruel Intentions, Donnie Darko, End of Watch, Ides of March, Hit & Run, Memento, The Mexican, Sliding Doors, Snitch, Undefeated and The Way Back.

Raven also talked about how it was active in financing independent films and stated, "given its operational expertise, [Raven] is well positioned to maximize the value of the Open Road assets."

A hearing to consider the sale will be held Friday. There are several big networks, including Turner, Viacom and Showtime, that have submitted limited objections to the assumption of contracts.