Yucaipa Cos. is suing the buyout store that acquired
former leisure studio in a chapter sale, accusing Lantern Capital Companions LP of fraud in reference to the $289 million deal.
Lantern declined remark, citing a coverage of not commenting on ongoing litigation. The allegations stem from a time when each Yucaipa—the funding agency co-founded by Mr. Burkle, a billionaire grocery-store magnate—and Lantern have been concerned in an effort to assist Weinstein Co. keep away from chapter.
In line with Yucaipa, it did the work, however Lantern did the deal, and the brand new proprietor is refusing to pay an agreed to charge for utilizing info gathered by Yucaipa to amass the Weinstein movie and TV enterprise.
In a lawsuit filed in state court docket in California, Yucaipa says it shared info with Lantern based mostly on an settlement that Lantern allegedly by no means meant to honor.
Accused of assault and harassment by dozens of ladies and formally charged with rape and different intercourse crimes, Harvey Weinstein was pushed out of the corporate final yr. He has pleaded not responsible and mentioned any interactions have been consensual.
After stories of Mr. Weinstein’s habits surfaced within the New York Occasions and New Yorker, enterprise companions recoiled from his leisure firm. Weinstein Co. tried to discover a purchaser outdoors of chapter to salvage the battered enterprise.
Accused in a number of lawsuits of getting enabled or did not cease Harvey Weinstein’s alleged serial predations, Weinstein Co. was anxious to keep away from the stigma of chapter, sources mentioned.
The hassle failed, and Weinstein Co. filed for chapter 11 chapter safety in March, throwing its movie library and different enterprise property on the public sale block. Lantern bid $310 million, then slashed its provide and this week closed on the deal.
In line with papers Yucaipa filed Monday in Los Angeles, Lantern had a bidding benefit as a result of work Yucaipa did in assessing the Weinstein enterprise earlier than the chapter, and is refusing to pay an agreed to charge of no less than $6 million.
The grievance sheds mild on the on-again, off-again negotiations that led as much as the Weinstein chapter, a veiled drama that included
a Weinstein Co. govt who was later pushed out of the enterprise, after which New York Legal professional Normal
who misplaced his job because of assault accusations.
Varied contenders have been circling the broken enterprise, together with a bunch backed by Mr. Burkle that included
a businesswoman who promised a woman-led board and victims fund as a part of a buyout.
Yucaipa says it was a longtime investor in Weinstein ventures, and was going to contribute its current stake within the firm to sponsor an acquisition and revival. It employed legal professionals and consultants to judge the enterprise, and Lantern agreed to provide you with $50 million, in response to the grievance.
As soon as it grew to become apparent chapter couldn’t be prevented, Yucaipa says it lower a second take care of Lantern, one that might give the buyout store a head begin on different contenders, in change for charges and bills if it received. By tapping the knowledge Yucaipa’s advisers had gathered, Lantern might form a bid quicker and with extra precision than rivals and achieve the “stalking horse” benefit, in response to the grievance.
A stalking horse is a bidder that shapes the competitors, setting a flooring worth and establishing the type of a deal, which different contenders need to beat. Lantern acquired Weinstein Co.’s property when no rivals stepped as much as bid in opposition to Lantern in chapter.
Write to Peg Brickley at firstname.lastname@example.org
Supply hyperlink – https://www.wsj.com/articles/ron-burkle-sues-lantern-for-fraud-in-weinstein-buyout-1531840154?mod=pls_whats_news_us_business_f