While a major element of the Weinstein Co. bankruptcy proceeding — a petition to change it from Chapter 11 to Chapter 7 — was postponed again Monday, two major claims have been settled.
U.S. Bankrupcy Court Judge Mary Walrath approved the settlements, one involving Viacom and the other between Weinstein Co. lender AI International and Union Bank. The latter pivoted on a $46 million claim from AI, which is tied to former Weinstein Co. board member Len Blavatnik, over proceeds from the sale of the Weinstein Co. to Lantern Entertainment for $289 million last year. The settlement saw the withdrawal of the claim.
The Viacom matter, which an attorney for the Weinstein Co. noted Monday had started out in the range of $40 million, was reduced to $16 million and then to a final amount of $11 million. Viacom will pay that final amount to Spyglass Media (which earlier this year teamed with Lantern on a new parent for the Weinstein assets) to resolve a dispute over Scream. The TV series adaptation of the hit horror series initially launched by Bob Weinsteins Dimension Films in the 1990s just debuted its third season on Viacoms VH1. Its first two seasons had streamed on Netflix.
Viacom had initially objected to a settlement between The Weinstein Co., Lantern and Netflix, mainly because it felt it had been cut out of the process. The media company said that settlement left the company unduly responsible for $9 million in financing for Scream. The production funding for the shows third season, it said, had been advanced on an emergency basis. Shooting was planned as the Weinstein Co.s business began to crumble in the fall of 2017 amid waves of sexual misconduct allegations against Harvey Weinstein.
During a 20-minute bankruptcy court hearing in Delaware on Monday morning, an attorney for Spyglass said the settlement also covers Sin City 2, which was not part of the asset portfolio acquired by Lantern. Under the terms of the settlement, Spyglass will collect and deliver proceeds from Sin City 2 on a quarterly basis to the debtors estate. Viacom also agreed to waive any further claims against the Weinstein Co. estate.
Paul Heath, an attorney with Richards Layton & Finger who represents the debtors, told Walrath at the start of the hearing that progress in settlement talks warranted another delay in the central matter of converting the bankruptcy proceeding from Chapter 11 to Chapter 7. “Its fair to say that the negotiations have been arms-length and difficult at times,” Heath said during the hearing, which was made available via teleconference. “While its not at the finish line, theres been sufficient progress to warrant a further extension. I think that the parties are optimistic that theyre going to be able to achieve a deal.”
In a Chapter 7 scenario, the company would be liquidated and a civil settlement of the claims against it would not be able to go forward. Settlement talks under a Chapter 11 framework have been a complex undertaking involving the insurance companies backing the officers and directors of TWC, the New York State Attorney Generals Office and the Committee of Unsecured Creditors. The committee represents many of those who have accused Harvey Weinstein of sexual assault, harassment and retaliation, and former officers and directors of enabling his conduct.
The most recent global settlement offer, totaling a reported $44 million, became public in May and cRead More – Source