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Kassar’s bazaar: Carolco’s assets on the block

Producers are a resilient lot, but Mario Kassar, the czar of Carolco Pictures, has proven positively feline in his ability to summon up new lives. Though Carolco has tottered on the brink of financial ruin, Kassar is now in advanced negotiations to sell its assets to 20th Century Fox, although Universal also is in the running, as is Andy Vajna’s Cinergi.

The deal could resurrect Kassar & Co. in a studio producing deal, once the burden of Carolco’s debt is removed, possibly through a pre-packaged bankruptcy along the lines of its 1993 restructuring.

The prize in an acquisition of Carolco’s assets would be rights to “Spider-Man,” a pet project of producer-director James Cameron that has long been trapped in multiparty litigation.

That tangle came closer to being untied when MGM recently assumed the interest in the property once claimed by Menachem Golan’s 21st Century Corp. Claims by Viacom and Columbia TriStar on the Marvel Comics hero have yet to be resolved, however.

Negotiations, which have been ongoing for several months, have centered on how to extricate Kassar and his staff from Carolco’s complex financial morass while acquiring sequel rights to Carolco’s prized big-budget blockbusters such as “Terminator 2: Judgment Day,” “Total Recall” and “Rambo III,” as well as securing Kassar’s producing services.

While both Fox and U have engaged in talks with Carolco’s top execs, industry insiders say Fox is ahead in the race to close the deal, if only because recent management changes at U have left negotiations in a lull. Fox’s relationship with Cameron also weighs heavily in its favor. On the other hand, Universal’s $20 million, three-pic pact with Sylvester Stallone could provide the star for Kassar’s tentpole films.

For a time, sources said, neither studio was aware that the other was mulling a Carolco deal.

With “Cutthroat Island” its single upcoming release and most of its commercial projects such as “Lolita” and “Showgirls” sold off, Carolco is a barely functioning entity. Its film library accounts for most of its cash flow, with license fees bringing in $8.2 million in its second quarter this year.

Carolco recently was granted a reprieve from insolvency by Credit Lyonnais when the bank extended a payment deadline on a $14 million credit line from Sept. 29 to Nov. 10.

But on Friday, Oct. 13, the unlucky company announced it failed to make interest payments on $55 million in outstanding notes. A 30-day grace period gives the company some breathing room.

Carolco is awaiting the Nov. 24 delivery of its $80 million “Cutthroat,” still in postproduction. Delivery of the completed film will allow the company to book payments from distribs and improve its balance sheet. The film opens Dec. 8.

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