The Weinstein Co. Files for Bankruptcy

Action could smooth path for buyout from Lantern Capital

Months after CEO Harvey Weinstein was ousted in the wake of a horrific sexual harassment scandal, The Weinstein Co. has filed for Chapter 11 bankruptcy protection, paving the way for a “stalking horse” bid for the TV and film production house by investment firm Lantern Capital Partners.

Weinstein was dismissed from The Weinstein Co. in October, days after The New York Times broke the story of decades of sexual harassment, assault and other misconduct the media mogul committed against actresses and employees. The story sent shockwaves throughout the entertainment industry and beyond, leading to several high-profile firings and sparking the #MeToo movement.

As part of the bankruptcy filing, TWC has released from non-disclosure agreements anyone who had witnessed or endured sexual misconduct by Harvey Weinstein.

The Weinstein Co., which produces reality TV hits like Project Runway, and the upcoming Waco and Yellowstone for Viacom, has tried to sell out to several other potential buyers in the past, but those deals have fizzled. The most recent – a $500 million offer from a group led by billionaire investor Ron Burkle and former U.S. Small Business Administration chief Maria Contreras-Sweet, fell apart after new liabilities which added to its debt load came to light.

The bankruptcy will not prevent other companies from making a bid, but Lantern Capital, which has reportedly offered cash and assumed debt valued at around $425 million for TWC, has set the minimum for subsequent bidders.

Based in Dallas, Lantern Capital is a unit of mid-sized private equity fund Lantern Asset Management and is run by Andy Mitchell and Milos Brajovic. Both have pledged to bring the studio back to its heyday, when it was one of the top independent film producers in the country. Lantern’s portfolio is decidedly absent entertainment investments – it’s biggest holdings are American Zinc Recycling, Roundtree Asset Management (a vehicle for rolling up underperforming car dealerships across the country), bulk shipping platform Good Bulk and North Carolina luxury resort Bright’s Creek.

According to the bankruptcy filing, TWC has assets and liabilities of between $500 million and $1 billion. Secured creditors like Union Bank and Bank of America are owed about $156 million. Among its top unsecured creditors are China film company Wanda Pictures ($14.4 million), marketer Palisades Media Group ($13.7 million) and Viacom ($5.6 million