The end of the bankruptcy road appears to be in sight for Open Road Films.
The troubled Los Angeles studio has entered into a potential acquisition deal with an anonymous bidder in advance of a Nov. 7 auction for the studio’s assets, according to recently filed court documents.
Open Road said in Tuesday’s filing that the agreed-to price of $87.5 million will serve as a floor for the bidding process. In addition, the studio said it will pay the anonymous, or “stalking horse,” bidder $2.1 million in the event that the transaction doesn’t go through, as well as $800,000 in costs related to the bid.
The anonymous bidder is referred to in court documents only as OR Acquisition Co.
Open Road, which had been part of Global Road Entertainment, filed for Chapter 11 bankruptcy protection in September following a string of box-office disappointments including the science fiction movie “A.X.L.” and the Jodie Foster thriller “Hotel Artemis.”
Just three years ago, Open Road had a major success with “Spotlight,” which it distributed. The 2015 drama about the Boston Globe’s reporting on the Catholic Church abuse scandal was a surprise winner of the Academy Award for best picture.
But the studio has since stumbled with one flop after another, like the historical drama “The Promise,” starring Christian Bale and Oscar Isaac.
This year, the company pulled the Johnny Depp movie “City of Lies” from its release schedule following reports that it was low on capital.
Open Road began its life as a joint venture between cinema chains AMC Entertainment and Regal Entertainment Group. Donald Tang, the founder of Tang Media Partners, later bought the company and combined it with his distribution and sales outfit IM Global to form Global Road Entertainment.
The bankruptcy filing this year only affected Open Road, which dealt with domestic movie distribution and finance, and not other parts of Tang’s company.