AME Inc., the bankrupt video post house, has a new owner.
In a lengthy auction process, the company was pulled from bankrupcty by a whopping $ 17 million bid from Westar Capital in Costa Mesa. “We knew there would be overbidding,” said an elated John Hyde, the bankruptcy trustee, chief exec of MCEG Sterling Entertainment Inc. “It was a very gratifying number. It means that for the past year, we’ve gotten the company into a condition so it can be sold.”
Most of the employees will be carried over with the new company. It appears Westar expects to combine AME with a similar facility, All Post Inc. That company’s president, Larry Kingen, is the former president of AME who lost his spot after the buyout.
“We’re very very pleased,” said George Crandell, general partner at Westar. “We plan to continue to run the company on an operating basis. It will be doing around $ 30 million in the first year.”
The video post-production company entered Chapter 11 almost exactly a year ago, pushed under by high debt from a management-led leveraged buyout.
As trustee, Hyde oversaw the company until Tuesday’s bidding. During bankruptcy, AME had $ 4 million in receivables and owed the First National Bank of Boston $ 60 million.
Hyde quickly engineered a competitive bidding war between three suitors, Image Technology Acquisition Corp., the Rabin brothers and Westar Capital, which is an investment partnership. Bankruptcy judge Kathleen March managed to keep the bidding lively from early afternoon when the initial proposals hovered around $ 12 million. But 17 rounds of spirited offers and counteroffers pushed the final price to $ 17,843,000, plus another $ 375,000 for a Prudential Insurance claim.
The expectation, according to attorneys, was that the offers would top out at just $14 million. When that mark was passed, Hyde reached over and slapped the hands of his colleagues. With the final bid, applause broke out in the courtroom.