3:59pm PT by Eriq Gardner
U.S. Trustee Objects to Weinstein Co. Sale Procedures
Now in bankruptcy, The Weinstein Co. envisions an auction for the studio's assets. Lantern Asset Management is the stalking horse bidder with a $310 million bid, but the bidding procedures still await a judge's blessing, and in advance of a hearing, the United States Trustee filed an objection on Tuesday.
The U.S. Trustee argues that the motion to approve sale procedures should be denied "because it would improperly give superpriority status to the break-up fee and expense reimbursement" from Lantern.
The bankruptcy judge was also told that while breakup fees can be used if they are truly necessary to preserve the value of the estate, Lantern can't jump the line of other creditors for administrative expenses.
Other parties are also objecting, perhaps unsurprisingly.
Various Hollywood guilds including SAG-AFTRA, the DGA and WGA — looking to ensure the continued payment of residuals and health care contributions — say they are in discussions to modify the stalking horse procedures.
According to their objection, "In connection with sale procedures, the Union Entities have raised concerns with limitations on their ability to monitor sale terms and disposition of Guild collateral if an auction should occur, particularly an auction for discrete motion pictures or other elements divisible from the body of rights and assets contemplated by the Stalking Horse bid."
The guilds say they want access to offers for TWC as well as the ability to attend the auction.
A hearing on the bidding procedure is scheduled for Friday in Delaware bankruptcy court.