LOS ANGELES (Reuters) - The Weinstein Co is close to a deal to restructure its debt and hand over control of more than 200 films from its library to creditors Goldman Sachs and an insurer, an attorney for the studio said on Thursday.
New York-based Weinstein Co -- started in 2005 with more than $1 billion in financing arranged by Goldman Sachs -- has struggled to produce hit movies, apart from 2009’s “Inglourious Basterds,” and the company has fought to avoid bankruptcy.
The restructuring agreement is expected to be concluded within days, said Bertram Fields, an attorney for the Weinstein Co. Goldman Sachs and insurance company Assured Guaranty Ltd will gain control of 200 to 250 films from the library.
Under the deal, the independent film studio run by brothers Bob and Harvey Weinstein can reclaim ownership of its films once its debt is paid, and the Weinsteins will retain control of about 150 films in their library, Fields said.
“It’s a big win for both sides. I’ve seen a lot of restructuring deals and usually someone gets the short end of the stick. This time both sides get the long end of the stick,” Fields said.
The creditors could get a small share of revenues from future Weinstein Co films as part of the restructuring deal, Fields said.
One of the company’s biggest potential box office draws is “Piranha 3D” in August. Its past films included “The Road” and comedy “Scary Movie 4.”
The Weinsteins will continue to distribute films covered under the agreement, and pass the revenue on to the creditors until its debt is paid off.
The Wall Street Journal, which first reported the news, said the Weinstein Co owes about $335 million.
The studio’s debt would have been higher, but Ambac Assurance Corp is agreeing to pay debtholders $115 million as part of its own restructuring, to release it from insuring part of the studio’s debt, the Journal reported.
Goldman Sachs acknowledged a deal in the works with the Weinstein Co, in a statement released on Thursday.
“We believe that the restructuring will allow the Weinstein Co to continue to produce new films, and to create value for all of its stakeholders,” the statement said. “All of the parties to the transaction have worked to arrive at this resolution.”
The Weinsteins started the independent studio after they left the Walt Disney Co, where they had run the Miramax Films unit, a company they founded in 1979.
The Weinsteins, in partnership with billionaire Ron Burkle, recently sought to buy back Miramax from Disney and obtained an exclusive negotiating window, but those talks hit a roadblock and other bidders moved in.
Reporting by Alex Dobuzinskis: Editing by Bernard Orr
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