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Columbia, Lions Gate call Terminator auction unfair – Yahoo! News
NEW YORK (Reuters) –
Columbia Pictures and Lions Gate Entertainment Corp are objecting to bankrupt Halcyon Holdings Inc's plans to sell the “Terminator” movie franchise to a California-based hedge fund.
The movie studios said in court documents on Wednesday that the hedge fund, Pacificor LLC, and Halcyon had changed the bidding rules just prior to the auction earlier this week and that it was not run fairly.
Halcyon Holding, which holds the rights to the “Terminator” franchise, filed for bankruptcy in August, and held a competitive auction to sell the rights to the film franchise on Monday.
Halcyon “conducted what should have been, but what unequivocally was not, an honest, open and fair auction for the sequel and remake (and related) rights,” Columbia and Lions Gate said in court papers.
Pacificor, which originally financed Halcyon's purchase of the Terminator rights, made a winning “credit bid” of $29.5 million for the franchise, according to a person familiar with the matter on Tuesday.
In a bankruptcy auction, lenders are allowed to “credit bid,” forgiving much of the debt they are owed in exchange for taking control of franchise. The movie studios said they were contesting last minute changes that allowed Pacificor to credit bid up to $38 million.
If the deal were approved Pacificor would have the rights to the revenue from future films, games, DVDs and television from the franchise.
Pacificor had beat out a joint bid from Lions Gate and Columbia, which is owned by Sony Corp.
An attorney for Halcyon was not immediately available.
The Bankruptcy Court in Los Angeles is set to hold a hearing on Wednesday on Halcyon's request to approve the sale.
The case is In re: T Asset Acquisition Company LLC, U.S. Bankruptcy Court, Central District of California, No. 09-31853.
(Reporting by Emily Chasan, Editing by Gerald E. McCormick)