The Weinstein Co. declared Tuesday afternoon that Lantern Capital was the winning bidder in its bankruptcy sale, turning away a late bid from Broadway producer Howard Kagan.
The company announced that Kagan’s $315 million bid, which was submitted Tuesday morning, lacked a financing commitment and other qualifications.
“Lantern’s bid clearly achieves the highest and best value for the estate and its creditors,” Ivona Smith, an independent member of the Weinstein board said in a statement. “We look forward to working with Lantern to close the transaction and consummate the going concern sale.”
Mary Walrath, a Delaware bankruptcy judge, must still sign off on the sale. Lantern had offered $310 million plus the assumption of project-based liabilities totaling $115 million. The committee of unsecured creditors has already filed an objection to the form of the Lantern bid, saying it is not clear that the Weinstein Co. is achieving the maximum return for creditors. The New York attorney general’s office is also expected to weigh in.
Five plaintiffs in a Weinstein class action case issued a statement earlier Tuesday supporting Kagan’s bid, which was said to include $30 million for victims of Weinstein’s alleged sexual misconduct. Kagan, a former hedge fund partner, submitted the bid under the name of Inclusion Media.
“The plaintiffs have every reason to believe that Inclusion Media will be the highest and best bidder and will be the ultimate purchaser of the Weinstein Co. assets,” said Cris Armenta, an attorney for the plaintiffs, after the Weinstein Co. announcement.
In its statement, the Weinstein Co. called the Kagan submission a “conditional indication of interest” that did not include a purchase agreement, a deposit, a financing commitment, or other key requirements. The document was also submitted after Monday afternoon’s deadline.
The five plaintiffs have argued that the Lantern bid “contains no fund for assault survivors, no equitable considerations for company employees, and no assurance protections to ensure that women are not required to submit to the ‘casting couch’ in exchange for a career in Hollywood.”
A hearing on the sale is set for 11:30 a.m. Eastern time on May 8 in Delaware bankruptcy court. Objections to the sale are due by 4 p.m. on May 7. An auction, which had been set for Friday, was canceled.
Update: Andy Mitchell and Milos Brajovic, the co-founders of Lantern, issued a statement:
“We are honored by the board’s recognition and acceptance of Lantern’s planned acquisition. Lantern looks forward to continuing our work with the constituents involved in this court supervised transaction. Furthermore, we appreciate the significant support from employees, business partners, creative talent and numerous industry leaders as we set out to launch this new company. Lantern Entertainment remains committed to providing premier content with a diverse workforce in a safe environment founded on a culture of respect and creativity.”
The full statement from the company:
The Weinstein Company is pleased to announce that Lantern Capital is the winning bidder in the sale for substantially all of the assets of the Company. No other bid offered as much value to the estate as the Lantern bid, which was also the Debtors’ stalking horse bid and was negotiated with input from the Office of the New York Attorney General. “Lantern’s bid clearly achieves the highest and best value for the estate and its creditors,” said Ms. Ivona Smith, a member of The Weinstein Company Board of Representatives. “We look forward to working with Lantern to close the transaction and consummate the going concern sale.”
Earlier today, news outlets reported that the Company received a letter of interest from Inclusion Media, a potential bidder backed by Howard Kagan. That letter, submitted after the bid deadline, was a conditional indication of interest that contemplated substantially less value to the estate, and did not include a purchase agreement, a financing commitment, a deposit, or a number of other requirements for a qualified bid. While the Inclusion letter did claim to offer certain attractive aspects for victims, the Debtors concluded after discussions with Mr. Kagan that the Inclusion letter was not a bona fide offer. Thus, in furtherance of its fiduciary duty, the Board selected the bid that offered, with certainty, the most overall value to the estate.