The Weinstein Co. is preparing for a bankruptcy filing next week by seeking “stalking horse” bids that would set a floor for a bankruptcy auction.
Several bidders reached out after the surprise collapse on Tuesday of a $500 million deal to sell the company to billionaire Ron Burkle and his partners. Among the possible early contenders are Lionsgate, which may be interested in acquiring the Weinstein Co.’s 277-film library, and Lantern Capital, according to sources.
The company has told bidders to make their best offer by Thursday, according to a source familiar with the deal. The bids are expected to be at least $300 million.
Lantern, a Dallas-based investment firm, previously partnered with Burkle and Maria Contreras-Sweet, the former head of the Small Business Administration, on their bid for the company. Burkle and Contreras-Sweet are also still interested in acquiring Weinstein assets, though it does not appear that they will make a stalking horse bid. Lantern seems willing to split off from Burkle and Contreras-Sweet and make an independent offer, though it’s also possible that they could team up again, sources tell Variety.
The company is also in need of debtor-in-possession financing, which would keep it operating during bankruptcy. Union Bank is its leading secured creditor, as the head of a group of lenders to whom the company owes $225 million. As Reuters first reported, the bank would like to provide the debtor-in-possession financing in order to keep its place at the head of the line of creditors. However, the Weinstein Co. is said to be considering numerous other offers.
A bankruptcy would generate millions of dollars in fees for the attorneys and bankers involved. It would also pause the sexual harassment suits that have been filed against the company, with the exception of a suit from New York Attorney General Eric Schneiderman. The company cannot discharge its liabilities for Harvey Weinstein’s alleged misconduct in bankruptcy, though it prolongs the process for victims.
Correction: An earlier version of the story said that the Schneiderman lawsuit would be paused in bankruptcy. In fact, it will go forward.