Open Road Films has received an $87.5 million stalking horse bid in advance of a bankruptcy auction next month.
An entity called OR Acquisition Co. filed an agreement to buy the bankrupt distributor on Tuesday. The entity is affiliated with Raven Capital Management. The stalking horse bid sets a floor for the auction to be held on Nov. 7, and the entity would end up owning the company should no other bids emerge.
Open Road was purchased last year by Tang Media Partners and merged with IM Global, the foreign sales company, to form Global Road Entertainment. The distributor suffered a series of flops, including “Hotel Artemis” and “A.X.L.” In August, the company pulled Johnny Depp’s “City of Lies” from its September release date. The company was unable to raise additional capital, and has been sued for breaching its agreement to distribute “City of Lies.”
Bank of America led a group of creditors that took control of the company in mid-August, and Open Road declared bankruptcy on Sept. 6. IM Global was split off and is not part of the bankruptcy case. FTI Consulting is leading the restructuring effort.
OR Acquisition Co. registered as a Delaware corporation on Oct. 15. According to a bankruptcy filing, FTI has contacted 50 potential buyers for the Open Road assets, of which 36 signed non-disclosure agreements and 11 have submitted indications of interest in acquiring the assets.
Under the stalking horse agreement, OR Acquisition will be reimbursed for up to $800,000 worth of costs, and will receive a $2.1 million breakup fee if it is not the winning bidder.