On Monday, producer Marvin Peart hit the Dallas-based private equity firm with a $110 million lawsuit alleging he was excluded from the deal after bringing Lantern to the negotiating table. “Institutional racism” is being cited as part of the reason for Peart, who is African American, being dumped by Lantern.
With almost all the hallmarks of a classic double cross, the Mob Wives executive producer and his Marro Media shingle claim to have been promised more than $10 million by Lantern and a seat on the board of the acquired asset for bringing Lantern in as a minority investor in the original consortium bid led by Ron Burkle and Maria Contreras-Sweet.
The Weinstein Co. Warns Of 'Significant Risk' Sale To Lantern Capital Might Not Close
Of course, this occurred after TWC fell into disrepair after allegations of sexual assault and harassment against co-founder Harvey Weinstein went public last October. Burkle and Contreras-Sweet withdrew, and TWC plunged into Chapter 11 bankruptcy. Lantern then took on 100% of the deal with plans to create a new company keeping the employees in place and exploiting the library, finished films and development feature and TV projects.
Lantern was granted “stalking horse” incumbency because of its early position in the deal and was named the winner of the bankruptcy auction when other bids failed to materialize.
“This lawsuit will shine an antiseptic light on Lantern and what happened to Marvin Peart at the hands of unscrupulous moneyed interests who cast him aside when they no longer needed him,” lawyer Pierce O’Donnell argues in the 10-claim complaint filed Monday in Los Angeles Superior Court (read it here). As well as putting a cash amount on the table, the suit citing “historical revisionism” seeks a jury trial and 10% of any future sale of what was once TWC by Lantern.
“The case has ramifications beyond these parties,” O’Donnell, the Greenberg Glusker Fields Claman & Machtinger LPP attorney, adds in the paperwork. “Besides recovering millions of dollars of compensatory and punitive damages for Lantern’s cynical mistreatment of Plaintiff, Mr. Peart’s victory will hopefully signal that African-Americans will no longer tolerate being treated as second class citizens in Hollywood” O’Donnell also cited “Lantern’s callous marginalization” of Peart.
As well as claiming racial motivations in Lantern Capital’s willingness to cast him aside, Peart’s action formally slaps the firm with breach of contract, fraud and misrepresentation claims, detailing how he has been denied a supposedly promised “introduction fee.” The move also makes a distinct point of alleging that Lantern failed to publicly acknowledge his role in bringing the Hollywood neophyte into such a high-profile transaction as taking over the scandal-hobbled TWC.
The 23-page civil suit lands at a critical time for TWC. The company warned in bankruptcy court filings last week that its pending sale to Lantern could collapse. The studio said it has been arguing with the firm over who would pay potentially tens of millions of dollars owed to actors and others involved in various film and TV projects.
After threats of lawsuits, the two sides reached an accord that involved dropping the purchase price. Now the sides need to close the deal by mid-July before Lantern’s financing commitment ends and TWC ends up in default of its loan agreement.
With that clock ticking, Peart’s suit adds a further complexity in a bankruptcy case. Casting himself as playing a pivotal behind-the-scenes role in assisting in putting the Lantern deal together, Peart had previous tight ties with TWC. Among them, he helped finance a slates of motion pictures and TV shows including such projects as Escape from Planet Earth, and The War With Grandpa, the theatrical production of Finding Neverland, and, of course, Mob Wives.
After the New York Times published its exposé regarding sexual misconduct by the company’s co-founder Harvey Weinstein early last October, the company began exploring a possible sale. In the court paperwork, Peart says he began talking with potential buyers eager to leverage his contacts with TWC to strike a deal. He also says that in fact he proactively reached out to Lantern Capital at the urging of an occasional business partner, Ivan Bajic, to gauge the firm’s interest in buying the distressed TWC’s assets.
“Any hope of breaking spectacularly into the industry via a buyout of TWC would absolutely require vouching and insider arm-twisting from a trusted, established and savvy player,” today’s filing claims of the seminal role Peart had in what played out. To that, the producer said he used his connections to bring Lantern to the bargaining table, arranging calls between former TWC chief operating officer David Glasser and Lantern’s managing partner Milos Brajovic.
At the request of Lantern CEO Andy Mitchell, Peart claims he made the introduction to billionaire investor Burkle and his investment firm The Yucaipa Cos. for the firm
“They were complete outsiders to the entertainment industry, had no visibility as a major investor, and needed the credibility of someone like Mr. Peart to assuage the skepticism of Hollywood insiders about Lantern,” O’Donnell asserts for his client. “It cannot be emphasized enough that TWC, Mr. Burkle and others all initially declined meetings with Lantern.”
In return for the 250 hours spent working on the deal, Peart said he was promised a fee of 2% of the purchase price as compensation and a seat on newly constituted studio’s board of directors. It was originally 3%, but when Lantern asked to pare that back a point, Peart told Deadline that would be OK– as long as his role in helping facilitate the transaction was made public and that he would be seriously considered for a board seat and the CEO position.
As a deal came together in early February, with investors Burkle and Lantern backing an investor group managed by former Obama administration official Contreras-Sweet, Peart said he found himself sidelined, cut off from access to meetings, and shut out of communications.
Peart saw a racial taint to his ostracism, citing a breakfast meeting in which Brajovic asked Peart — the only African-American in the room — to leave. “It was as if (Peart) was an interloper, a stranger to the transaction that he instigated,” the suit alleges. “There could be no more vivid illustration of Hollywood’s persistent racism.”
It is easy to ascribe a racial overtone in a blistering court document when an agreement breaks down, but Peart explained his feelings on the matter to Deadline.
“I’ve been black my whole life,” Peart told Deadline. “Certain things are overt, and certain things more subtle. It is only later that I can begin to think back to situations and say, why did this happen this way and why does it continue to happen? Why was I never focused on, put out front, the guy who brought us into this negotiation, who architected this through his relationships, who pushed to get us to the table? Where is my name? Why is my name not mentioned, and why am I not in these meetings?
“I’m a credible person, and I don’t understand why I was never used more that way,” he said. “You guys are looking for a CEO and putting together a board, why wouldn’t I be considered as a candidate? I felt like I was basically laughed at, and my resume is not something you laugh at. I have not been milking cows for 20 years, I have more experience in this industry than all you guys.”
“When we interviewed candidates for CFO, I was the only person in the room asking the right questions,” Peart asserts. “Nobody else in that room knew the questions to ask. So why am I being scoffed at, marginalized and dismissed? I was serious enough to bring you to the table, but not serious enough to do anything else?
“One of the movies they were attracted to in this asset-based acquisition was The War With Grandpa,” he adds. “This was a book we pursued after my son read it, and I was smart enough to do everything from finance the picture to help cast all the actors. Harvey and Bob Weinstein didn’t do that, I did. And now it is a prized asset.”
“I’ve produced over 100 hours of television for the same company they’re buying. Why am I not being considered?” the producer asks.
“There are subtleties, when a person doesn’t look like the person you expect. When a person of color is not considered to do the very things they’ve shown they can do adequately, there is a reason for that. Nobody called me [the n-word] to my face, but they didn’t put me on correspondence, either, and it became clear over time that my advice and counsel were only good enough until you got what you wanted, and that was it. If I’m not on the merits a candidate for CEO, put me through the same process as other white candidates, or there’s a problem there. You’re not giving the one person who brought you to the table any credit.”
Peart said the latter was of paramount importance to him.
“I was supposed to receive 3% of the asset purchase price but I said to them from day one that I would accept 2%, if I could be included in every email, every correspondence, and get the credit for what I’d done,” Peart said. “I was giving up the point, because I thought, I can turn the point into 10 points, with the right positioning. I was the only black person in the room, and you were there because of me. Lantern’s senior and junior team, they are all white men. Unless there is fraud, or I am not qualified, it becomes about how you see me versus what my credentials are.
“People who deal with me know I’m a professional who does what he says. I pride myself on being a man of my word, because I don’t want to give anyone excuse to deal with me in certain way. How best to handle yourself in a town full bullsh*tters? Don’t be one. I’ve taken this journey on my own, and I have been forced here to try to do this with one hand tied behind my back.”
Peart said this wasn’t the first time he’d been involved in using his connections to facilitate a deal: “Once upon a time I was part of a big private equity group that tried to buy BET, but we couldn’t get Viacom to focus on what they wanted to do with the asset. That transaction would have been a lot bigger. This is all relationship-based. If I’m Harvey and Bob or David Glasser, and I have been in business with Marvin for a decade, and every time he says he will do something, he does it, and I come in and say I have a group that wants to buy your company, they take me seriously. The only reason they considered a small private equity shop was because I was bringing them. I vetted them and so they knew this was real. I’d done the homework and they all knew that unless they walked in and said something disrespectful, we know they are real because Marvin brought them into the company.”
Peart said Lantern stopped talking to him altogether in March. The producer says he learned from press reports that the Texas company had submitted the stalking horse bid in the Weinstein Co.’s bankruptcy, and ultimately, emerged with the prize. He has neither received the $10.5 million he says he is owed for his work on behalf of Lantern, nor the public recognition for his role in the transaction.
Asked how it felt to find himself on the outside, Peart said: “It made me feel stupid, that was my first reaction. There are people I know who knew I was doing this, and when the articles started launching, my name was nowhere in the mix. I would ask [Lantern] and they would say, that’s not us, we are not writing these stories. I said, are you telling me they’re making up quotes? They were playing me for stupid and I am not that.
“The number one thing I said upfront was that the most important consideration for me, more than the money, was the credit,” he said. “I needed the credit. People [who look] like me don’t do these kind of deals in Hollywood. In order to change perception, you have to do things that are different. You would not expect a person like me to make Escape From Planet Earth, because not a lot of people like me get those crossover movies made in Hollywood, there’s not a long line of black producers and financiers, following in the footsteps of those that came before. That’s why this was a priority, to break ground for people who look like me, because if I don’t do it, who will?
“I’m the guy who brought you to the table, so why don’t you have me in meetings? Why are you hiding me when you are only here because of me? David Glasser was told by Moelis & Co, why do you want us to include this small firm? And the answer was, because they were brought to us by someone we trust. If I was a white man, I think I would have been brought more into the process.”
Lantern declined to comment on the lawsuit when contacted by Deadline.
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