AME Sold for $18 Million in Bankruptcy Proceedings : Burbank: It will be merged with another video post-production company begun by a former president who left in 1989.

AME Inc. in Burbank, once Hollywood’s biggest video post-production firm, has been sold for $18.2 million, effectively ending a year in bankruptcy reorganization.

The top bid came from a group led by Larry Kingen, a former AME president who started a rival company in Burbank called All Post Inc. Kingen was backed by Westar Capital, a Costa Mesa investment firm that put up most of the money for the purchase last week at a hearing in U. S. Bankruptcy Court in Los Angeles.

When the deal is completed, expected by the end of July, AME’s operations will be merged with those of the smaller All Post. The combined company will assume the All Post name, and have annual sales of about $35 million, said Kingen, who will be president and chief executive officer.

Kingen, 51, left AME in early 1989 shortly after a group led by New York investor Lawrence Berkowitz took AME private in a $108.5-million leveraged buyout, meaning most of the cash was borrowed. But the debt load suffocated AME, and last July it sought protection from creditors under Chapter 11 of the federal bankruptcy laws, listing assets of $41 million and debts totaling $124 million. In 1991, AME had sales of more than $50 million and was one of the world’s leaders in transferring movie and television films to videotape.

“We plan to rebuild (AME) to the preeminence and dominance it had a few years ago,” Kingen said.

AME was founded in 1980 by Andrew McIntyre, who left after the leveraged buyout. In late 1991, he made a failed attempt to buy AME back for $25 million.

Kingen will replace Jan Yarbrough, who has led AME for the past two years. Yarbrough said he was unsure whether he would join All Post. The rest of AME’s 375 workers are expected to be retained, Kingen said.

Kingen and Westar paid more than what most analysts thought AME would fetch. For months, the top bid was hovering at $12 million. And that was the opening bid when the scene shifted to Bankruptcy Court in Los Angeles last week.

But then Westar, Steinhardt Partners in New York and Rabin Partners in San Francisco engaged in a lively and often entertaining bidding war. In three hours, the three groups went through 17 rounds of bidding, making 43 offers among them. When the last one was made by Kingen and Westar, Judge Kathleen March turned to the two Rabin brothers and, in a play of words on an Edgar Allan Poe poem, said, “The Rabins, no more.”

John Hyde, AME’s bankruptcy trustee, said he always thought the company had a value of more than $15 million. “Very few agreed with me,” said Hyde, who is legally entitled to get up to 3% of the sale price, or more than $500,000. “It proved I was right.”

George Crandell, a general partner at Westar, an investment firm that focuses on mid-sized growth companies, said he was drawn to AME because of its potential. AME made good progress during its year in bankruptcy reorganization, Crandell said. “Given the resulting price, I would say they did a very good job.”