The Weinstein Co. announced Friday that it has reached an agreement with its unsecured creditors, clearing a final obstacle to closing its long-awaited sale to Lantern Capital.
The deal comes as the parties were preparing for a make-or-break hearing next Wednesday in Delaware bankruptcy court. The Weinstein Co. had agreed to reduce the sale price from $310 million to $287 million, drawing strong opposition from the unsecured creditors committee. Under the agreement, the sale price increases to $289 million, and certain professionals have agreed to waive $1 million in fees.
“We are delighted that today’s agreement clears the path for this sale to close,” Robert Del Genio, the company’s chief restructuring officer, said in a statement. “Lantern represents the highest and best value to creditors after the competitive bidding process. We thank Lantern and the UCC for their constructive approach to achieving deal certainty.”
Lantern’s co-founders, Andy Mitchell and Milos Brajovic, issued their own statement: “This collective resolution affirms our commitment to closing the transaction. This significant milestone is a very productive and positive step, and we are grateful to be part of the solution.”
Robert Feinstein, an attorney for the committee, called the initial price cut a “money grab” at a hearing last week, and said the company was “rolling over” for Lantern at the expense of victims of Harvey Weinstein’s sexual misconduct.
The agreement comes as the Weinstein Co. was running out of time to complete the transaction. At a hearing last week, Weinstein Co. attorney Paul Zumbro said the studio would run out of interim financing on July 17, and that Lantern’s commitment from its own lender would expire on July 15.
The Weinstein Co. declared bankruptcy in March. At the time, Lantern put in a stalking horse bid to purchase the company for $310 million and assume $115 million of project-based debt. The deal was initially expected to close in early June, but Lantern reportedly balked. Lantern has since claimed that it was misled by the Weinstein Co., and has refused to pay millions of dollars in profit participations owed by the company to actors and directors.
Zumbro has said the company agreed to the price reduction because it has no backup bid, and does not have the time or money to sue Lantern to force compliance with the sale agreement.
The standoff nearly scuttled the sale two weeks ago, which would have forced the company into liquidation.