%1

Broadway producer Howard Kagan said he has raised his last-minute bid for the Weinstein Company in another push to acquire the TV and film producer, which filed for bankruptcy in the wake of harassment claims against co-founder Harvey Weinstein, Reuters reported. The Weinstein Co. on Tuesday selected Lantern Capital’s $310 million bid for the company and rejected an offer from Kagan that he said was worth $315 million. Kagan’s initial bid, made through his Inclusion Media LLC business, lacked a deposit and financing, according to the Weinstein Co. “We have increased our offer to $325 million, matching Lantern’s cash bid and providing the cash needed to satisfy Lantern’s alleged breakup fee claims,” Kagan said yesterday. Kagan has not yet made a deposit or shown he has committed financing for his new bid. The money raised from the sale will be used to pay off the Weinstein Co’s creditors. Kagan said his bid would include compensation for harassment plaintiffs.

Hospital and Florence (Ariz.) Hospital at Anthem are seeking to force the hospitals into bankruptcy in an attempt to collect $1.96 million they claim the affiliated hospitals owe, according to court documents, Becker's Hospital Review reported. The involuntary chapter 11 petition for Florence Hospital — filed jointly by three employees — seeks $46,650 in wages. An unsecured creditors trust, the hospital's founder and CMO Timothy Johns, MD, and a Phoenix-based law firm filed Gilbert Hospital's involuntary bankruptcy petition, which seeks more than $1.9 million. This is the second time the hospitals have landed in bankruptcy court. The hospitals filed for voluntary chapter 11 bankruptcy in 2014, according to court documents. In court documents filed May 1, creditors claim the hospitals have failed to make lease payments for months and that the facilities are "on the brink of complete shutdown." Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

Struggling upstart film studio Relativity Media is getting another reboot, the Wall Street Journal reported. The Los Angeles company, which emerged from bankruptcy two years ago after being plagued by a string of box-office flops, has agreed to be acquired by a joint venture that intends to revitalize the business, which has a distribution deal with Netflix Inc. The venture, UltraV Holdings LLC, will acquire Relativity through a § 363 sale as part of a chapter 11 bankruptcy proceeding, the film studio said today. Relativity and related certain parties plan to file chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York, the company said. UltraV Holdings comprises funds backed by Sound Point Capital Management, a New York asset management firm with $17 billion of assets under management, and RMRM Holdings. The joint venture intends to provide sufficient funds to the company so it can resume operations, including the development and distribution of content through Netflix and other platforms, Relativity said.

Remington Outdoor Co. saw its bankruptcy process move swiftly toward an end Wednesday when a judge said he would approve the firearms maker’s reorganization plan, which will place the company under the ownership of its creditors, WSJ Pro Bankruptcy reported. Judge Brendan Shannon of the U.S. Bankruptcy Court in Wilmington, Del., indicated he would sign off on the plan, subject to changes, despite attorneys for the U.S. trustee and Securities and Exchange Commission arguing against the broad protections offered to third parties that could shield them from future litigation. Remington’s plan was fully supported by its lenders and creditors, court papers show. In addition, the plan includes a $5 million litigation trust that could be used in the future to bring certain claims against stakeholders.

The embattled political consulting firm Cambridge Analytica announced yesterday that it would cease most operations and file for bankruptcy amid growing legal and political scrutiny of its business practices and work for Donald J. Trump’s presidential campaign, the New York Times reported. The decision was made less than two months after Cambridge Analytica and Facebook became embroiled in a data-harvesting scandal that compromised the personal information of up to 87 million people. In a statement posted to its website, Cambridge Analytica said that the controversy had driven away virtually all of the company’s customers, forcing it to file for bankruptcy in both the U.S. and Britain. The elections division of Cambridge’s British affiliate, SCL Group, will also shut down, the company said.

The judge presiding over Cumulus Media Inc.’s restructuring confirmed a bankruptcy-exit plan that junior creditors said undervalued the radio station operator and its ability to squeeze revenue from a shrinking broadcast market, WSJ Pro Bankruptcy reported. Judge Shelley C. Chapman of the U.S. Bankruptcy Court in Manhattan, N.Y. pegged the company’s worth at $1.675 billion in an oral ruling yesterday, adopting the valuation suggested by Cumulus adviser PJT Partners Inc. Judge Chapman's ruling approved a balance-sheet restructuring strategy that pays off only top-ranking lenders in full while leaving unsecured creditors, including bondholders owed more than $600 million, less than 14 cents on the dollar.

Lynn Tilton reached settlements with creditors of the $2.5 billion Zohar funds she created, a legal cease-fire that comes after the turnaround executive placed the troubled investment vehicles in bankruptcy, WSJ Pro Bankruptcy reported. The settlement framework will keep the three Zohar funds — collateralized loan obligations that raised money for Tilton’s collection of troubled businesses — in bankruptcy while monetizing the loans they made to companies, according to papers filed with the U.S. Bankruptcy Court in Wilmington, Del. Money from the Zohar funds had fueled portfolio companies run by Tilton such as fire engine manufacturer American LaFrance and aerospace manufacturer MD Helicopters Inc. She said she placed Zohar I, Zohar II and Zohar III in bankruptcy to make the most of those businesses, though investors who backed her disagreed with her motives and wanted her replaced by an outside bankruptcy trustee. The first two Zohar funds have defaulted, leaving guarantor MBIA Insurance Corp. on the hook to make up the difference to creditors. Investors are counting on the third, which matures in April 2019, to make good on what it owes. Tilton filed the bankruptcy case shortly before the Delaware Supreme Court was expected to decide whether she owned three businesses that the Zohar funds’ manager Alvarez & Marsal said were rightfully theirs.

The Weinstein Company yesterday named a Dallas private equity firm as the winning bidder in its bankruptcy sale, spurning an offer by the Broadway producer Howard Kagan, the New York Times reported. The victor — for now, at least, as a bankruptcy judge still has to sign off and the decision could be challenged by creditors — is Lantern Capital Partners. It entered the sale as the studio’s prearranged bidder, or “stalking horse,” which set a price floor. Lantern offered $310 million plus the assumption of about $115 million in debt. Lantern has no Hollywood experience as its portfolio includes underperforming auto dealerships and a company that recycles zinc. Lantern became involved with the Weinstein Company this year, when it agreed to help finance an attempt to help the troubled studio avert bankruptcy. That effort, led in part by the billionaire Ron Burkle, fell apart in March. The Weinstein Company imploded in October after dozens of women publicly accused its former chief executive, Harvey Weinstein, of sexual misconduct stretching back decades. It announced on March 19 that it would file for bankruptcy. The movie and television studio, once known for Oscar-winning films like “The King’s Speech” and “The Artist,” had less than $500,000 in cash. It was facing a mountain of debt and a swelling number of lawsuits, including one by New York’s attorney general.

DxO Labs, maker of the DxO One camera attachment and PhotoLab, FilmPack and ViewPoint photo software, has filed for chapter 11, PetaPixel.com reports. The French company says that the purpose of the bankruptcy filing is to “restructure the business” and that it “will not affect our customers in any way.” Everything should also be completed and resolved within “a few more weeks.” In the meantime, DxO Labs is still hard at work on its photography software. Having acquired the Nik Collection from Google in October 2017, DxO Labs now says its first new version for the collection will be coming in June 2018.

Oaktree Capital Management LP, a debt investor in Claire’s Stores Inc., is criticizing how the retailer is marketing its assets in bankruptcy court, saying the sale timeline is so short that potential new bids might not reflect improvements to its operations, WSJ Pro Bankruptcy reported. The seller of accessories and jewelry aimed at girls and young women entered bankruptcy in March with a reorganization plan already blessed by private-equity owner Apollo Global Management LLC and major first-lien debtholders. From the start, Oaktree opposed the deal, saying holders of $240 million in second-lien notes have been unfairly shut out of the negotiations, which could pave the way for first-lien creditors to control of the company when it leaves bankruptcy. The Los Angeles-based investment firm owns 72 percent of Claire’s second-lien debt and has said that it would get nothing in the reorganization. Oaktree also said Apollo’s proposed role in the reorganized Claire’s should come under particular scrutiny since, besides being Claire’s equity owner now, it also owns first-lien debt that could be converted into equity in the new company.