Howard Kagan, the Broadway producer who placed a Hail Mary bid for the Weinstein Co. on Tuesday, told Variety that he was shut out of the process because the company refused to turn over information.
“I just needed a day or two,” Kagan said in an interview Tuesday evening. “They have refused to engage. We were shut down today and the victims were shut down today. They’re going to get zero.”
The Weinstein Co. declared on Tuesday afternoon that Lantern Capital was the winning bidder. Lantern, which had partnered earlier with billionaire Ron Burkle on a pre-bankruptcy sale, put in a stalking horse bid of $310 million, plus some liabilities. Though the Weinstein Co.’s attorneys had talked up interest in the sale, at one point saying that 60 potential buyers had expressed interest, only Lantern submitted a bid for the whole company by the 5 p.m. deadline on Monday.
Kagan, a former partner at Harbinger Capital Partners, submitted a late bid on Tuesday morning for $315 million. Kagan offered a $30 million fund for victims of Weinstein’s alleged sexual harassment, including equity in the company. However, the company said in a statement that his offer lacked a deposit, a purchase agreement, and committed financing. The company rejected the offer and canceled the bankruptcy auction, which was set for Friday. A court hearing is scheduled for May 8 to confirm the sale to Lantern.
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Kagan said the company had failed to provide details on which contracts were essential and how much it would cost to cure defaults. In a call Tuesday with the company’s representatives, Kagan said they “raked me over the coals and came up with a hundred reasons why they didn’t want a second bid.”
“It strikes me as folks that are not really taking their obligations to maximize value seriously,” he said. “At the very least you’d think they would want a backup bid.”
He speculated that Lantern, a Dallas-based private equity fund, might be getting cold feet, and the company realized it had to close as fast as possible.
Kagan said he was drawn to the Weinstein Co. because full-fledged production companies rarely come on the market, and because the entertainment business is in a state of disruption, which creates an opportunity. He also said the idea of Lantern winning the bid, without a provision for Weinstein’s victims, struck him as unjust.
“I just find it astounding that Lantern and their investors would be so eager to close this deal when they have taken so much pleasure in one step after another cutting the victims off at their knees,” he said. “How does the Lantern team think it’s going to run a studio?”
A source told Variety that Kagan’s deal was largely composed of high-interest debt.
“It’s all refinanceable after we close,” Kagan said, without disclosing his backers. “It’s not easy to get a lender to show up and make a loan when you can’t get the company to give you the information.”
Kagan said the fate of his deal now rests with New York Attorney General Eric Schneiderman, who has previously weighed in to protect victims in the sale process. It’s not clear, however, that Schneiderman will want to throw his weight behind any particular bidder in this instance.
“We’ll see what the attorney general does,” Kagan said. “Is he going to stand by those lofty goals?”
Update: Amy Spitalnick, a spokeswoman for Schneiderman, issued the following statement:
“From the start, we’ve underscored the importance of adequately compensating victims, protecting current and future employees, and ensuring that wrongdoers are not rewarded. We’ll continue to push for those critical goals. Our lawsuit remains active and our investigation remains ongoing.”
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