Entertainment One, which sued The Weinstein Company earlier this month for money it says was owed when TWC sold off distribution rights to “Paddington 2,” has demanded that a California federal judge place a lien on the company.
The Canadian distributor, which had an output deal with TWC, had previously said it was owed $7.2 million for its 2014 advance on the family film as well as expenditures for its planned release — before Weinstein Co. sold it to Warner Bros. last fall in the wake of the forced resignation of co-founder Harvey Weinstein.
The new filing comes as TWC tries to close a deal with an ownership group led by former U.S. Small Business Administrator Maria Contreras-Sweet that was close to being completed two weeks ago but which has been delayed by a civil rights lawsuit filed by New York Attorney General Eric Schneiderman.
In the wake of Schneiderman’s lawsuit, the TWC board fired President and Chief Operating Officer David Glasser, who had been set to take over as CEO under the new ownership. (Glasser is now planning to file an $85 million wrongful termination lawsuit.)
In court filings obtained by TheWrap, eOne’s attorney Martin Katz argued that Glasser’s dismissal may be a sign that the deal may be completed, and if it is, there is no guarantee that the new ownership will leave aside funds to repay the master advance.
If the lien is granted, TWC would not be able to sell its assets without meeting the debts owed to eOne.
“Irrespective of the twist and turns it may take, the TWC quagmire poses substantial and immediate risks of irreparable injury to eOne,” reads the application. “If Defendants sell their assets, there is no assurance that there will be funds available set aside from the payout or committed by the buyer to pay eOne the substantial amount it is owed.
A rep for TWC did not respond to TheWrap’s request for comment. A judge’s decision is expected to come later this week.
Pamela Chelin contributed to this report.