UPDATED with more details: The bankruptcy auction for the sale of The Weinstein Company has been moved to May 4 from an original date of May 2, and creditors want stalking horse bidder Lantern Capital to explain how it values separate pieces of the company’s assets in its $425 million bid.
The news came Friday morning during a hearing in federal court in Wilmington, DE to discuss bidding procedures for the company. More than a dozen lawyers were present today, representing the creditors, The Weinstein Company and different assets and groups that are part of the sale, including Hotel Mumbai and the guilds for actors, writers and directors.
A lawyer for Hotel Mumbai, the film based on events surrounding the 2008 Pakistani terrorist attacks on the Taj Mahal Palace Hotel in India that stars Dev Patel and Armie Hammer, argued The Weinstein Company had no rights to the film and hadn’t received promised information from Lantern Capital about its plans with the movie.
There are 23 potential buyers for The Weinstein Company, according to its attorneys. Thirteen of them are financial buyers – similar to Lantern Capital, which has no previous experience in the entertainment industry – and 10 of them strategic buyers.
The bidding timeline, outlined in this court document, sets the bid deadline for April 30. If there are multiple qualified bids for The Weinstein Co.’s assets, an auction will be held on May 4.
After creditors voiced their request for Lantern Capital to allocate their bid for the company’s assets, they met with Weinstein Company attorneys for a few minutes outside the courtroom. They agreed to postpone a decision until future hearings, at which the creditors reserved the right to push for the stalking horse to release their allocations again.
Other potential buyers must allocate their bids, assigning value to the film library, TV business and unreleased films portions of The Weinstein Company’s portfolio.
Robert Feinstein, an attorney for the creditors, said they were concerned about the sale bringing as high as possible a bid if the stalking horse didn’t have to allocate its value of the assets and other potential bidders did.
“It would be nice if we had the stalking horse bidder willing to allocate but they’re not,” he said. “We’ll just move forward.”
The Weinstein Company’s assets include cash flows from a library of 277 feature films that have grossed more than $2 billion and garnered 28 Academy Awards and several unreleased movies and TV shows. The future of these unreleased properties is up in the air if they can’t get their rights back from TWC.
Earlier this week, representatives for Hotel Mumbai said in a filing they had rescinded an agreement with The Weinstein Company after the sexual assault allegations. “We don’t believe the debtors have any rights to the film,” an attorney for the movie said at today’s hearing.
He acknowledged arguments about who owns the film’s rights would likely need to be reserved for May 7, at the sale hearing following the auction.
The Weinstein Company agreed to spend $10 million to promote Hotel Mumbai and release it within a year after filming wrapped. The producers are concerned whether they’d receive a similar deal from whoever buys the company. The attorney for the movie claimed Lantern Capital had promised information on whether it could and had not provided it.
Other films and TV shows have been able to escape The Weinstein Company’s grip, including Lin Manuel-Miranda’s In the Heights.
On Tuesday, the U.S. Trustee overseeing the bankruptcy filed an objection against protections for Lantern Capital that would give it an advantage over other creditors in collecting fees because of a $9.3 million breakup fee and a reimbursement of up to $6.3 million in expenses. The Weinstein Company’s lawyers reiterated today the need for the breakup fee and reimbursement, saying Lantern Capital wouldn’t proceed without them.
The Weinstein Company filed for bankruptcy last month after a $500 million deal with billionaire Ron Burkle and Maria Contreras-Sweet collapsed. Lantern Capital’s $425 million bid includes $310 million in cash and $115 million for liabilities.