It wasn’t salvation but certainly a welcome breather as a bankruptcy judge lobbed some much-needed cash at the beleaguered producing duo behind “Terminator Salvation.”
Derek Anderson and Victor Kubicek’s Halcyon Co. had sought the relief this week in a flurry of legal filings in which they valued the “Terminator” franchise at north of $70 million — well above Halcyon’s debt, which is owed largely to a Santa Barbara, Calif.-based hedge fund, Pacificor.
Anderson said that figure is born out by “financing and purchase offers that I have received from various third parties,” including Sony and a Swiss firm called European Special Opportunities Advisors.
Anderson said in a filing that “he is informed” that Sony “has offered to provide more than sufficient funds to pay Pacificor in full.”
Sony declined to comment.
The partners don’t particularly want to sell, despite their current woes.
“Victor and I are both huge ‘Terminator’ fans, and we do see (‘Salvation’) as a foundation for where we take the franchise in the future,” Anderson told Daily Variety. “Studios are enthusiastic. We have no regrets, all the trials and tribulations aside.”
Kubicek added: “Obviously, this is the last place we thought we would be in … But you have to deal with what’s in front of you. It’s been eye-opening.”
The two acquired the “Terminator” franchise in 2007 with a $30 million loan from Pacificor but wound up in a nasty legal battle and filed for Chapter 11 in late August, with a big chunk of Halcyon’s assets frozen. The company started September with a cash balance of $5,500 and risked shutting down if it couldn’t make payroll this month.
U.S. Bankruptcy Judge Ernest Robles in Los Angeles did two things: He freed up $2.1 million in tax rebates due Halcyon but being held by Union Bank of California; he also ruled earlier this week that Halcyon and its related companies could use cash collateral to finance their operations on an interim basis through the fall.
So Halcyon can work on developing a fifth film in the franchise and keep running the cottage industry it started from scratch in rather short order after buying the “Terminator” rights — including T Asset Acquisition Co., T Salvation Distribution, Halcyon Consumer Products, Halcyon Games, Halcyon Development, Halcyon Music, Halcyon Intl. and T Salvation Distribution Co.
The intense time pressure in bidding on “Terminator,” financing the bid and building infrastructure needed to develop it explain to some extent why Halcyon negotiated throughout with a lender it now accuses of deliberately pushing it into default in order to seize the franchise and sell it to someone else.
The partners also stuck with a middleman, Kurt Benjamin, who introduced the producers to Pacificor and whom Halcyon has accused of doubling dealing and extortion. In a lawsuit filed last month, Halcyon said Benjamin threatened to scuttle a bridge loan from Pacificor and to sabotage Halcyon’s relationship with the hedge fund.
Benjamin has denied the allegations.
Pacificor CEO Andrew Mitchell has said he is only trying to protect his investment and maximize profits as behooves a responsible chief executive.
“From when we heard about the possible opportunity, and the time in which we had to act, when we closed on the rights, the development of the script, to when the film was released, was such a short window,” Anderson told Daily Variety. “There were huge time obstacles we had to overcome.”
“Terminator Salvation,” produced with Warner Bros. and Sony, cost just under $200 million. It opened last May to lower-than-anticipated domestic box office but showed muscle overseas and has amassed worldwide grosses of $371 million. The DVD comes out in early December.
Halcyon’s other assets include a first-look deal to acquire motion picture and related rights to the works of science fiction writer Philip K. Dick plus a first-look deal with biographer and Vanity Fair writer Bob Colacello. Halcyon also plans to produce an English-language remake of Susanne Bier’s Oscar-nommed pic “After the Wedding.”
The company’s bankruptcy attorney, Scott Gautier, stressed that the Chapter 11 filing was voluntary, and precipitated by Pacificor’s placement of an improper lien on certain assets, making it impossible for the company to meet its debt obligations.
But “once you submit to that process,” he said, it has to work its way through the system. He figures things could be wrapped up in four to five months.
If they could do it all over again, Anderson and Kubicek said they’d manage a few things differently.
“I think that in terms of meeting people you do business with, it’s certainly better to go for a personal recommendation, and we’ve done that in the past. But (with) more investigation, more talking to people who have done this,” Anderson said.