www.cannon.org.uk

Cannon to Weintraub

(1987)

[intended to be part of –eventually- the Cannon Screen Entertainment

timeline. If you’d like to help with that or maintain this page please get in touch]

You may of seen me mention Cannon’s old Thorn-EMI Screen Entertainment (TESE) back catalogue often on this site. That substantial catalogue was sold off to the Weintraub Entertainment Group. Strange purchaser who was never going to be around long once the cash ran out. They made a handful of films like My Stepmother is An Alien and fell into bankruptcy late 1990. It’s extraordinary that film library went for as little as it did and that money must have been made back multiple times over by the new owners since DVD came along. Much of those films are now released in the UK through Optimum Releasing (owned by Vivendi-Universal).

WEINTRAUB FIRM SEEKS BANKRUPTCY PROTECTION

LA Times, September 15, 1990

Weintraub Entertainment Group and three of its units on Friday filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code after the company's banks insisted that $84.8 million in loans be paid.

The studio will try to reorganize and keep operating, President Kenneth Kleinberg said. The filing doesn't affect the personal assets of Jerry Weintraub, the company's chairman and chief shareholder.

Some of the company's bondholders, who are owed $91 million, had threatened to file an involuntary bankruptcy petition after the Bank of America and Credit Lyonnais Bank Nederland demanded payment of their loans, which are secured by Weintraub's 2,000-title film library.

The bondholders feared that they would get little if the banks retired their own debt by selling the library. Kleinberg said restructuring efforts were hampered by a weakened economy. "Like many other assets, including Southern California real estate, the library, if sold today, is not expected to realize its true value," Kleinberg said. Weintraub Entertainment bought the library from Cannon Group Inc. two years ago for more than $80 million.

The federal government is the largest unsecured creditor, with $22.5 million in Weintraub junk bonds that were bought by failed thrifts. Those bonds are now held by the Resolution Trust Corp., the federal agency in charge of mopping up the savings and loan mess.

The bankruptcy petition listed $15 million in bonds owned by the RTC that had been owned by CenTrust Savings in Miami, a now-defunct thrift that was sold to Great Western Financial. Another $7.5 million was owned by Imperial Federal Savings in San Diego, now operated by government regulators.

Also, $13 million in bonds is owned by two troubled thrifts--Columbia Savings in Beverly Hills and Far West Savings in Newport Beach--that the government could eventually own if they are ultimately seized by regulators.

The Weintraub bond offering was underwritten by Bear, Stearns & Co. But the list of bondholders also includes many former customers of Drexel Burnham Lambert junk bond chief Michael Milken, a Weintraub friend. The thrifts were all major Milken customers. A unit of Zenith National Insurance, headed by Milken's second cousin, Stanley Zax, owns $3 million in Weintraub bonds.

The petitions also listed debts to Hollywood writers and producers who have worked on films that Weintraub still hopes to produce. Among those debts are $280,000 to writer Sam Hamm for a script called "The Avengers" and $100,000 to writer Joe Eszterhas for "Jade."

Weintraub Entertainment, launched with more than $400 million in funding in 1987, got into trouble after half a dozen of its films flopped. –LA Times

WEG went bankrupt in September 1990. From SEC.gov:

Weintraub Entertainment Group ("WEG") during the period January 23, 1987 through October 1, 1990. Named as defendants are WEG (WEG is a debtor in bankruptcy, and is thus named as a defendant only to the extent permitted under federal bankruptcy law), certain officers and directors of WEG, including Jerry Weintraub, Kenneth Kleinberg and Dennis Pope (the "Individual Defendants") and Bear Stearns, the place- ment agent in WEG's 1987 private placement of WEG debentures and warrants.

Most of this film catalogue is now with StudioCanal who are owned by Vivendi-Universal.

CANNON GROUP: SALE OF FILM LIBRARY

HL Deb 07 April 1987 vol 486 c1018WA 1018WA

Lord Graham of Edmonton asked Her Majesty's Government:

Whether the Cannon Group is proposing to sell its film library and the Pathé newsreel library to the Weintraub Entertainment Group of Los Angeles; if so, whether they consider the proposed sale to be compatible with assurances given by the Cannon Group at the time it acquired the Thorn/EMI film library, which led to the acquisition not being referred to the Office of Fair Trading; and what action they propose to take to prevent the proposed sale; and

Whether they expect that the Cannon Group will honour its commitments, made at the time of its acquisition of Thorn/EMI, to refurbish the Elstree film studio and stimulate British film production.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)

The decision of my right honourable friend the Secretary of State for Trade and Industry not to refer the acquisition of Screen Entertainment by the Cannon Group to the Monopolies and Mergers Commission was not conditional on undertakings from Cannon. Any undertakings given in these circumstances would not have been enforceable. Decisions on investment priorities are ones which are generally best left to the commercial judgment of companies.

The proposed sale of Cannon's film library and archive (formerly the Thorn/EMI film library) may qualify for investigation by the MMC under the merger provisions of the Fair Trading Act and is currently under preliminary consideration at the Office of Fair Trading. If it qualifies for investigation, the Director General of Fair Trading has a duty to advise the Secretary of State on the question of reference to the Monopolies and Mergers Commission.

Back to INTERMEDIATE TREATMENT

Forward to SPEECH BY JUDGE ARGYLE

http://hansard.millbanksystems.com/written_answers/1987/apr/07/cannon-group-sale-of-film-library

link to this page: www.cannon.org.uk/cse.htm

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