The Weinstein Company went into a Delaware bankruptcy court Tuesday for what they hoped was a swift formality — a sales hearing to uphold Lantern Capital Partners’ planned purchase of its studio and 277-film library — and got its wish. Dallas private equity firm Lantern Capital was the lone party to vie for TWC ahead of its April 30 bidding deadline, nullifying the need for an auction between prospective owners. Lantern’s offer was worth $425 million ($310 million cash and assuming $115 million in liabilities).
As TWC attorney Karin DeMasi revealed on May 7, “To the best of Debtors’ knowledge, no senior management is or will be involved with the post-closing enterprise,” meaning Bob Weinstein appears to be exiting the 13-year-old studio. It is unknown whether company headquarters will remain in Manhattan.
Deadline reports that fellow TWC lawyer Paul Zumbro — one of almost 100 attorneys present in the courtroom today — implored Judge Mary Walrath to greenlight the sale immediately: “If the sale is not approved by 11:59 PM on May 8, Lantern Capital has the right to terminate,” he said. “We are concerned there would be significant value erosion if the Lantern Capital claim doesn’t move forward.” She conceded.
A committee of unsecured TWC creditors did not object to the sale, even though it is unclear what how much Lantern money, if any, will be allocated toward women with current and future sexual harassment claims against the company. The committee’s chairperson has her own personal allegation against Harvey Weinstein, now under investigated for sexual misconduct in New York, Los Angeles, and London. Actress Louisette Geiss says that at the 2008 Sundance Film Festival, Weinstein surprised her in an open bathrobe, asked her to watch him masturbate, and pulled her into the bathroom when she refused. In December 2017, she and five more self-described Weinstein victims filed a class-action racketeering lawsuit against the Oscar-winning producer and TWC.
Questions over a victim’s fund concerned former New York Attorney General Eric Schneiderman, who dealt TWC a February civil rights lawsuit (before resigning May 7; like Weinstein, he was on the receiving end of a New Yorker story where Ronan Farrow chronicled his alleged history of assaulting women).
Weinstein himself hoped to delay the sale: He sought access to 800,000 files from his time as TWC co-chairman, which ended with his October 8 firing. Celebrities from Quentin Tarantino and Meryl Streep to Jay-Z and Eminem are also likely unhappy with this outcome; they filed objections to the sale, insisting they are owed payment for past work.
Geiss’ co-plaintiffs — Katherine Kendall, Zoe Brock, Sarah Ann Masse, Melissa Sagemiller, and Nannette Klatt — said they would rather see Inclusion Media named as TWC’s new owner. Founded by Broadway producer Howard Kagan, Inclusion Media requested a May 1 extension to the bidding deadline, hoping to pay $325 million for TWC’s film and television holdings, setting aside $30 million and five percent of the new company’s equity for victims. Kagan planned to keep TWC in New York City, a goal shared by Mayor Bill de Blasio.
The unsecured creditors committee never took an official position on Kagan’s entry into the bidding. However, TWC’s attorneys did not want Judge Walrath to acquiesce to him, writing in court documents obtained by Variety, “Inclusion Media’s purported offer lacked all of the criteria of a real offer” — including a financing commitment, deposit, and thorough purchase and sale agreements — “and appeared calculated to disrupt the Lantern sale process, rather than to materialize into a legitimate bid. While Inclusion Media’s concept of a victim fund has obvious benefits for a worthy subset of the unsecured creditors, Debtors have seen no evidence to date that Inclusion Media is a serious bidder.”
Furthermore, TWC counsel submitted May 3 paperwork requesting all correspondence between the committee, Kagan, and Weinstein’s accusers, and to have one of its representatives deposed from the case. The committee objected to the deposition; committee attorney Elizabeth Fegan called the request “one more attempt by the Weinstein Company to silence women.”
On May 7, TWC lawyers accused the committee and Kagan of carrying out “a coordinated effort to sabotage the Court-approved process […]the Committee is subjecting the estate to the serious risks associated with losing the bird in the hand.” But the worries were for naught.