Weinstein Co. Auction Pits Creditors Against Harvey, BlavatnikBy
Creditors protest Blavatnik’s bid, say it would benefit Harvey
Co-founder Weinstein had personally guaranteed Blavatnik loan
Creditors of Weinstein Co. said Leonard Blavatnik’s Access shouldn’t be allowed to bid on the movie company’s assets, in part because it would benefit the firm’s co-founder Harvey Weinstein.
The deadline for bids for the Weinstein Co. assets is on Monday at 5:00 p.m. New York time. While AI International Holdings (BVI) Ltd., also known as Access, said it plans to "credit bid" or use its loans to Weinstein Co. to make an offer, it shouldn’t be allowed to, creditors said. Access hasn’t proven that its loan gives it rights to the copyright assets it wants to buy, they said in court papers filed Friday. Besides, creditors said, any such bid would benefit Weinstein, who personally guaranteed the loan.
Weinstein Co. was hobbled by a wave of sexual harassment and assault claims against Harvey Weinstein dating back to the 1970’s. The company had fired him in October.
Lawyers for Harvey Weinstein weren’t immediately available for comment outside of regular working hours and a lawyer for Access didn’t immediately comment.
Access seeks to buy international distribution rights on assets it says are part of its collateral package, and creditors say Blavatnik’s company hasn’t proven it has a right to those assets. They also say Access received assets of the estate within a 90-day window before its March 20 bankruptcy, meaning that creditors have a right to claw them back.
"Cause exists to prohibit Access from submitting credit bid solely on the foreign distribution rights, particularly where one of the principal beneficiaries of an Access credit bid is Harvey Weinstein," the company’s official committee of creditors said in the filing.
Lantern Capital Partners has also offered $310 million for the film and TV studio, making it the opening bidder in an auction. The Dallas-based private equity firm, if it’s not outbid, would take on assets including a library of more than 277 films that have generated $2 billion of box-office sales and a television business with hits including “Project Runway.”
The company, founded in 2005 by Harvey Weinstein and his brother Robert, owes banks and creditors more than $367 million, according to court documents. Among the list of unsecured creditors: a unit of Chinese billionaire Wang Jianlin’s Dalian Wanda Group Co., David Boies’ law firm and Viacom Inc.
Blavatnik is no stranger to bankruptcy auctions or entertainment assets; Access expressed interest, but then withdrew an offer in 2010 to restructure Metro-Goldwyn-Mayer Inc.’s assets. He owns Warner Music Group, and was also recently said to be interested in EMI Music Publishing.
The case is In re: The Weinstein Company Holdings LLC, 18-10601, U.S. Bankruptcy Court, District of Delaware (Wilmington)