June 15, 2010 6:45 PM
Movie Industry Merry-Go-Round: Am Law Firms Queue Up for Hollywood Work
Posted by Brian Baxter
A total of nine firms are advising various clients vying for control of two film studios: independent Lions Gate Entertainment and The Walt Disney Company's art house unit Miramax Films.
The Am Law Daily has learned that Sheppard Mullin Richter & Hampton transactional, entertainment, and technology chair Robert Darwell and Irell & Manella corporate partner Peter Juzwiak have taken the lead in advising Disney on its attempts to rid itself of Miramax, which has been ailing in recent years both financially and on Oscar night.
But Disney's planned $625 million sale of Miramax--owner of a 600-film catalogue that includes such Oscar-winning titles as Pulp Fiction, Good Will Hunting, and Chicago--hit the skids in late May when negotiations with Miramax founders Bob and Harvey Weinstein and billionaire backer Ron Burkle collapsed amid conflicts over how the two brothers would run Miramax along with their own studio, The Weinstein Company (TWC).
The Weinstein brothers launched Miramax in 1979 and sold it to Disney for $80 million in 1993. They continued to run the studio for the next 12 years before leaving in March 2005 after squabbling with Disney executives. The two brothers founded TWC that same year.
Representing the Weinsteins in their effort to reacquire Miramax is O'Melveny & Myers entertainment, sports, and media practice chair Joseph Calabrese, who also heads the firm's Southern California transactional practice. Entertainment partners Stephen Scharf and Matthew Erramouspe are also advising the Weinsteins, who previously tapped O'Melveny for their 2005 exit from Disney and the subsequent creation of TWC.
Harold Flegelman, cochair of the media and entertainment practice at Loeb & Loeb in Los Angeles, is advising Burkle and his Yucaipa Companies, which were supporting the Weinsteins in their bid to reacquire Miramax. Now that the group's exclusive negotiating window with Disney has closed, other bidders for Miramax are back in the hunt.
The Los Angeles Times reported earlier this month that construction magnate Ron Tutor and film producer David Bergstein were in exclusive talks for Miramax. The Am Law Daily has learned the two are being represented by veteran entertainment industry lawyer Michael Barnes, founder of three-lawyer Santa Monica boutique the Barnes Law Firm, which broke off from Los Angeles firm Morris Yorn Barnes & Levine in 2007.
Bergstein's reputation in Hollywood circles has taken a hit over involuntary bankruptcy proceedings that began earlier this year for five film companies he controls. The New York Times reported last week that representatives of several Hollywood guilds had told Disney about their concerns should Miramax be sold to Bergstein.
Dow Jones Newswires reported on Tuesday that Ronald Durkin, a former FBI agent appointed interim trustee to oversee the five bankrupt companies controlled by Bergstein, accused the film financier of preventing him from doing his job. (L.A. bankruptcy boutique Gumport Mastan is representing Durkin in Chapter 11 proceedings, while Holme Roberts & Owen is advising Bergstein, who has resisted being deposed in the case.)
Bergstein's bankruptcy woes have reportedly left the door open a crack for the Weinsteins. The New York Post reported on Monday that TWC was weighing whether to make another offer for Miramax. The studio's would-be seller, Disney, has lined up plenty of outside legal help to handle the ongoing negotiations.
Sheppard Mullin media and entertainment partners Thomas Leo and Shaun Clark are also advising Disney on the Miramax sale talks along with associate Michael Landres. (The firm is also representing Disney in a nasty six-year litigation battle over profits from Who Wants to Be a Millionaire, and the company's former general counsel, Louis Meisinger, later became a Sheppard Mullin partner before California Gov. Arnold Schwarzenegger appointed him as a judge to the Los Angeles Superior Court in January 2008.)
While the various twists and turns over the future of Miramax might provide enough fodder for their own big-screen drama, across the border in Canada a takeover battle for control of Lions Gate is playing out between age-old adversaries Carl Icahn and Wachtell, Lipton, Rosen & Katz.
Wachtell M&A partner James Cole, Jr., has been retained by a special committee of the board of directors for Lions Gate to defend against an Icahn takeover effort. Corporate securities cochair Jonathan Lampe and litigation partner Jessica Kimmel from Canadian firm Goodmans have also been retained by the special committee.
Lions Gate itself has retained Canadian firm Heenan Blaikie. National securities and corporate finance chair Jeff Barnes, national trade and competition chair Subrata Bhattacharjee, M&A partners Catherine Wade and Allen Garson, labor and employment partner Peter Gall, litigation partners Geoff Plant (the former attorney general of British Columbia) and Wendy Berman, and litigation counsel Donald Munroe are advising Vancouver-based Lions Gate, which also has headquarters in Santa Monica.
Two Heenan Blaikie partners--comanaging partner Norman Bacal and entertainment practice chair Arthur Evrensel--are serving on Lions Gate's board of directors but are not working with the team from the firm on the Icahn matter. (Another Lions Gate director, Morley Koffman, is a founding partner of Vancouver firm Koffman Kalef. Yet another director, Brian Tobin, is a senior business adviser and member of the public policy group at Canadian firm Fraser Milner Casgrain.)
In May a Canadian appeals court ruled against Lions Gate in the studio's effort to restore a shareholder rights plan that would have prevented Icahn from pursuing his takeover bid. After Icahn pledged to keep Lions Gate's Canadian operations, Reuters reports the country's regulators chose not to stand in the way of his offer to buy the studio. The nixing of Lions Gate's "poison pill" means that a proxy fight likely looms between Icahn, Lions Gate, and the studio's Wachtell-led cadre of lawyers. (Wachtell and Icahn have faced off many a time in the past, most recently in a proxy fight at Motorola in 2008.)
As previously reported by The Am Law Daily, Icahn has retained Canadian firm Osler, Hoskin & Harcourt for his planned takeover of Lions Gate. The firm previously advised Icahn on his investment in Fairmont Hotels and subsequent unsolicited takeover bid for the company.
M&A partner Donald Ross is leading an Oslers team from Toronto and New York that includes corporate partners Jason Comerford and David Hanick, antitrust partner Shuli Rodal, and litigation partners Mark Gelowitz and Allan Coleman. The firm is serving as both U.S. and Canadian counsel to Icahn.
Lions Gate shareholders rejected Icahn's tender offer earlier this month. Afterwards Icahn claimed that the studio was teetering on the brink of bankruptcy, a charge the producer and distributor of such films like American Psycho, Saw, and Fahrenheit 9/11 completely rejected in a letter to shareholders. Icahn has said he'll relinquish his investment in Lions Gate if his takeover effort fails.
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