Investors Escalate Fight Over Weinstein Co. Takeover
(Bloomberg) -- Ron Burkle's Yucaipa Co. is beefing up its allegations against investors that bought out the assets of the failed Weinstein Co., seeking compensation after its own aborted takeover attempt.
Los Angeles-based Yucaipa is seeking to add new claims that Lantern Asset Management GP used confidential information to buy the Weinstein assets. Now the investment firm is alleging fraud by the two co-presidents of the private equity firm, Milos Brajovic and Andy Mitchell, saying they reneged on verbal offers to allow Yucaipa to invest in the assets and pay expenses.
Weinstein Co. and its co-founder, Harvey Weinstein, are buried in legal battles following a New York Times expose of sexual misconduct by the film mogul.
Lantern acquired the assets of Weinstein Co. out of bankruptcy last year in a deal worth $437 million, including debt, and earlier this year joined with former Metro-Goldwyn-Mayer chief Gary Barber to put the assets under a new name. The new studio, Spyglass Media Group, was added as a defendant in a proposed amended complaint filed Wednesday in Los Angeles Superior Court.
Spyglass, which is the new name for Lantern, is now roped into the dispute. It declined to comment.
Yucaipa claims it only agreed to its information being used to help Lantern acquire the Weinstein Co. assets provided that the Burkle-led vehicle was reimbursed and permitted to invest in the successor entity if Lantern won the assets.
“But, like the plot twists in the Hollywood movies that defendants hoped to invest in, defendants' promises turned out to be lies,” Yucaipa said in the amended complaint.
The billionaire Burkle had planned to invest in the Weinstein Co. takeover as part of a deal led by Maria Contreras-Sweet, who ran the U.S. Small Business Administration from 2014 to 2017, but the bid failed.
To contact the reporters on this story: Anousha Sakoui in Los Angeles at asakoui@bloomberg.net;Edvard Pettersson in Los Angeles at epettersson@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, ;Elizabeth Wollman at ewollman@bloomberg.net, Peter Blumberg
©2019 Bloomberg L.P.
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