Hollywood Who’s Who Raise Objections To Weinstein Co. Sale
Some of Hollywood’s most prominent actors, directors, producers and writers are objecting to the sale of The Weinstein Company to Lantern Capital, raising fresh questions about the Dallas private equity firm’s willingness to make good on the bankrupt company’s contractual obligations.
One document filed today with the U.S. Bankruptcy Court urges the judge not to approve the new, reduced purchase price for The Weinstein Co.’s assets without first extracting a guarantee of payment to those in Hollywood who say they are still owed money by the bankrupt studio.
The list of those still awaiting their checks includes a who’s who of Hollywood elites including Brad Pitt, David O. Russell, George Clooney, Jake Gyllenhaal, John Cusack, Julia Roberts, Meryl Streep, Rachel McAdams and Robert Di Niro, as well as CAA.
“Lantern has not shown any willingness to pay, or even negotiate, the claims … and instead appears to favor continuing litigation by the Debtors against the Counterparties at substantial cost to the estates,” writes Michael Gottfried and Roye Zur, two attorneys representing the group (read the filing here).
Quentin Tarantino filed a separate objection to the sale, saying he’s still owed $4.3 million in unpaid royalties and participations in connection with four of his films distributed by The Weinstein Co.: Grindhouse/Death Proof, Inglourious Basterds, Django Unchained and The Hateful Eight.
“Over the past two months, the Tarantino Parties have attempted to work diligently with The Debtors and Lantern in an effort to determine the precise cure amount due upon assumption and whether to consent to assumption and assignment to Lantern,” wrote Tarantino’s lawyer Laurel Roglen. “The Debtors and Lantern, however, have not reciprocated.”
The Weinstein Co. agreed in late June to drop the purchase price by $23 million to ensure the sale to Lantern closes. At the time the company said the discount was intended to resolve a dispute over who would pay the millions of dollars in outstanding amounts owed in connection with the various film and television projects Lantern would acquire through the sale.
The creditor’s committee, which initially objected to the discount, negotiated a more modest $21 million price cut with Lantern and TWC. A hearing will be held Wednesday in Delaware bankruptcy court to weigh approval of the new $289 million deal.
Legal experts expected creditors to come out of the woodwork ahead of this week’s court hearing, to reassert their financial claims. Still, Lantern will need to resolve matters with top talent if it plans to continue producing movies and TV series.
“While the Counterparties believe that the change in the proposed price reduction is constructive, the amount is a mere ‘drop in the bucket’ given the ongoing legal fees and costs involved in the bankruptcy proceedings, the litigation and the sale itself,” Gottfried and Zur note.
The court filing on behalf of Clooney, Streep, CAA and 15 others cites a little-noticed change in the purchase agreement that raises doubt about whether Lantern intends to pay some of the amounts owed on certain projects.
“At present, Lantern and the Debtors are actively seeking to avoid paying the cure amounts owed to the Counterparties and numerous others, under the guise that the contracts at issue (which have been listed in multiple notices filed by the Debtors, including the Final Contract List) are ‘not executory,’ ” the court document argues. “Absent resolution of the Counterparties’ claims and a commitment from Lantern that the cure amounts owed to the Counterparties will be paid, there is no justification for reducing the purchase price.”