EXCLUSIVE: Nailed It! and Hell’s Kitchen production group Tinopolis has made its latest peace offer to a group of angry former producers, who are owed £50 million ($70 million) by the company after a controversial financial restructuring.
Around 15 producers, including Magical Elves founders Dan Cutforth and Jane Lipsitz, are considering taking legal action after Tinopolis wiped out the value of their loan notes in March. These loan notes were essentially IOUs promised to producers at the point they sold their company to Tinopolis.
Tinopolis said the financial restructuring was critical to securing the future of the business after it was imperiled by the coronavirus crisis. “The damage caused by Covid has been significant and a complete recovery will not be easy,” executive chair Ron Jones said in April.
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Now, in a bid to head off a lawsuit, Tinopolis has offered the loan note holders a fixed cash payment of £5,000, or part of a 5% stake in Tinopolis Group Limited, a management-owned company created in the financial restructuring that controls the group’s trading entities.
In a letter sent to former producers late last month, Tinopolis Group Limited’s attorney Blake Morgan said the offer was “fair and reasonable for all parties” and is not open for negotiation. Loan note holders have until June 28 to accept the terms, according to the letter obtained by Deadline.
Morgan stressed that Tinopolis Group had been “ravaged” by Covid-19 and the restructuring was necessary to avoid a “complete cessation of the business.” This “regrettably” meant liquidating subsidiary DMWSL 584, which held around £100M of loan notes, half of which belonged to management and the other half to producers who were once part of the group.
Deadline understands that the 15 disgruntled loan note holders are unlikely to accept the offer, given it is some way short of what they are owed. They continue to explore legal action and remain in talks with a Queen’s Counsel about the case after receiving expressions of interest from four litigation funds keen on bankrolling their grievance.
The previous offer they received was made through Buchler Phillips, which is responsible for liquidating DMWSL 584. The offer included a dividend distribution from the liquidation as well as part of a 5% stake in Tinopolis Group Limited.
Morgan said Buchler Phillips “may be reluctant” to pay out a dividend amid the threat of legal action “for fear of leaving the Liquidators and/or the Company [DMWSL 584] without sufficient resources to defend themselves.”
A Tinopolis Group Limited spokesman said: “We (TGL) are under no obligation to make the offer, but having sought feedback from the liquidators, we consider the terms of the offer to be fair and reasonable for all parties.”
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