Weinstein Co. failed to attract serious offers from its bankruptcy auction Monday, leaving Dallas-based private equity firm Lantern Capital Partners as the winning bidder by default, according to two people familiar with the situation.
The bidding process had attracted some interest from companies that wanted the troubled studio’s library and other assets. But no bid came close to topping Lantern’s so-called stalking horse offer made in March.
There was scant interest among obvious potential buyers, reflecting the battered state of the once-highflying studio. Lionsgate, Metro-Goldwyn-Mayer and Miramax — the studio formerly owned by the Weinstein brothers — were among those that did not submit bids for the New York studio’s assets, according to people familiar with the matter who were not authorized to comment.
Weinstein Co. declined to comment.
The dearth of competitive offers marks an anticlimactic outcome for Weinstein Co. after attorneys told the U.S. Bankruptcy Court judge in Delaware that the auction had attracted dozens of potential bidders. Weinstein Co. and its creditors were hoping a bidding war would drive up the sale price.
“The whole idea is to get to an auction,” said Robert Marticello, a Costa Mesa-based attorney at Smiley Wang-Ekvall, who has worked on bankruptcy sales and is not involved in the Weinstein Co. case. “Once you get everyone around the table for an auction, that will drive up the value.”
The deal comes about seven months after dozens of sexual assault and harassment allegations against Harvey Weinstein sent the studio into a tailspin. Weinstein Co., known for “The King’s Speech” and “Django Unchained,” filed for Chapter 11 bankruptcy protection March 19 after negotiations to sell to billionaire Ron Burkle and former Obama official Maria Contreras-Sweet collapsed.
The studio filed for bankruptcy with less than $500,000 in cash and hundreds of millions of dollars in liabilities owed to creditors, including Union Bank and Len Blavatnik’s Access Industries.
Weinstein, who launched the studio in 2005 with his brother, Bob, has denied all allegations of nonconsensual sex.
Lantern was the only bidder interested in keeping the company intact post-bankruptcy. The firm has spoken to possible executives and met with movie and TV producers to help revive the studio, said one person familiar with the process.
Lantern, which was a minority backer of the failed bid from Burkle and Contreras-Sweet, offered $310 million in cash for the company. With no other major offers on the table, Lantern will acquire the assets and assume about $115 million in liabilities related to certain film and television projects. The bid was at least $100 million higher than any competitor, said one person briefed on the process.
Any sale must be approved by a Bankruptcy Court judge. If the company had received other qualified bids, an auction would have taken place Friday in New York. Participants are expected to find out about next steps on Tuesday.
New York Atty. Gen. Eric Schneiderman, who sued the company and its co-founders when it was on the verge of a deal in February, wrote an open letter to all parties involved in the bidding process, urging them to compensate Weinstein’s accusers. Schneiderman’s civil rights lawsuit against the company and the Weinstein brothers is ongoing.
Weinstein Co. has been badly bruised by the slide into bankruptcy. It sold the rights to movies such as “Six Billion Dollar Man” and the Robert De Niro comedy “War With Grandpa” in order to preserve the business. By March, its workforce had dwindled to 85 full-time employees from the 120 people the studio employed as recently as October, when the New York Times and the New Yorker published their Weinstein exposes.
Adding to the woes, celebrities including Brad Pitt and Heidi Klum filed objections in Bankruptcy Court on Monday, saying they haven’t been paid money they’re owed under contracts with the studio.
Blavatnik’s Access Industries had said it planned to submit a credit bid for foreign film distribution rights, according to court documents. Weinstein Co.’s unsecured creditors last week objected to that plan because such a bid could benefit Harvey Weinstein, who personally guaranteed a loan from Access.
8:35 p.m.: This article was updated to include Lantern Capital Partners as the winning bidder.
This article was originally published at 4:50 p.m.