The U.S. Trustee overseeing The Weinstein Company’s bankruptcy has filed an objection to certain protections afforded Stalking Horse bidder Lantern Capital that would give the firm priority over other creditors in collecting certain fees.
The Dallas-based firm offered $310 million cash, plus the assumption of debt, for the film and TV assets of the studio, which saw its business rapidly deteriorate in the face of sexual harassment and assault allegations brought against its co-founder, Harvey Weinstein.
Lantern’s agreement, reached before TWC filed for protection from creditors in bankruptcy court, calls for a $9.3 million break-up fee and reimbursement of up to $6.2 million in expenses. The studio urges the court to approve these fees — saying they were necessary to entice Lantern to enter a so-called “Stalking Horse” agreement that effectively sets a minimum price for subsequent bidding on the Weinstein Co.’s assets.
Trustee Andrew R. Vara filed a motion Tuesday opposing this provision which, as drafted, would give Lantern “superiority status” in collecting these fees ahead of other Weinstein Co. creditors waiting for payment. He argued there’s no legal precedent for this.
“Permitting the Stalking Horse to prime other administrative expense claimants has no basis in the bankruptcy code,” Vara wrote.
Bankruptcy Court Judge Mary F. Walrath will review the formal bidding procedures for the sale of the Weinstein Co.’s assets at a hearing tomorrow morning in Delaware.
The hearing marks the beginning of the end of The Weinstein Co., as it sheds a film library of 277 feature films that have generated more than $2 billion in box office receipts, scripted and unscripted television series including Project Runway, and unreleased titles such as Hotel Mumbai and The Upside.
New details about the Weinstein Co.’s assets are being revealed in court filings.
A+E Television Networks, the parent company of cable network Lifetime, which airs Project Runway, put the court on notice that it terminated its contract for the long-running fashion-themed reality series following the Weinstein allegations.
In the Heights, the movie adaptation of the Tony-winning stage musical by Hamilton‘s Lin-Manuel Miranda and Quiara Alegría Hudes, has gotten clear of The Weinstein Company. The creators won back their rights to the property after New York Times and the New Yorker reported allegations against Weinstein.