New York Federal Bankruptcy Court has approved Live Entertainment’s plan to acquire the assets and liabilities of Vestron Inc. The decision clears the way for Live to begin releasing Vestron’s unreleased films and exploiting Vestron’s vast library.
In addition, per the decision, Vestron’s liabilities will now be paid in full, by Live, with the exception of monies due Vestron’s subordinated debtholders. They will be offered $6 million in cash and $21 million in Live preferred stock as well as contingent rights to Live common stock.
The decision was handed down Jan. 9 by Judge Cornelius Blackshear.
The next step, according to Vestron counsel, Klaus Eppler, is for the court to approve a disclosure statement to go to the Vestron bondholders and to approve the text of Vestron’s Chapter 11 reorganization plan. “We took an important step yesterday,” said a Vestron executive. “The tough hurdles have been leaped.” Live offered Vestron a definitive purchase agreement a year ago.
Completing court approval of the purchase required some 11th-hour negotiating last week, with certain royalty holders who opposed the sale. Eppler said settlements eventually were reached with all but one, Great American Film.
Vestron’s assets include 10 films that have not been released in any media. One film, “Class Of 1999″ was in limited theatrical release, but all other rights are intact and unexploited. Another film, “Fear,” aired on Showtime. In addition, Vestron has more than 50 unreleased non-theatrical programs and a catalog of 2,000 features and special interest tapes.