In a deal that would effectively put it out of business if approved, Qintex Entertainment Inc., the bankrupt television production and distribution company, announced on Tuesday a plan to sell off assets worth more than $65 million in two separate transactions.
Under the first deal, the company's entertainment holdings, including Hal Roach Studios Inc., the television miniseries "Lonesome Dove" and 1,000 other library titles and future development projects, would be sold to RHI Entertainment Inc., a television production company in New York, for $42.4 million.
In the second deal, Qintex would sell its interest in HR Broadcasting Co. to ABRY Communications in Boston for more than $40 million. The transaction would return $23 million to Qintex after debts are paid. HR Broadcasting owns television stations WTTO in Birmingham, Ala., and WCGV in Milwaukee.
"We think, given the market for these types of assets . . . the result is as good as can be expected, and in the interest of everybody involved," said Qintex President Jonathan Lloyd.
Qintex has continued to operate with a staff of about 50 since its bankruptcy filing last October. Lloyd said the staff would probably remain until the reorganization occurs. At that point, Qintex would essentially become a shell company.
Qintex filed for protection under Chapter 11 of the U.S. Bankruptcy Code after failing to pay MCA Television Ltd. $5.9 million owed under a film distribution agreement.
The company's financial woes started when Qintex Australia Ltd., which owns 43% of Qintex Entertainment, failed in a bid to buy MGM/UA Communications Corp. for $1.5 billion last October. That deal collapsed after Qintex Australia could not attain the funding for a $50-million down payment.
The plan for selling Qintex's assets was reached in an arrangement with the Beverly Hills-based company's creditors and investment bankers Donaldson, Lufkin & Jenrette. All plans must ultimately be approved by the bankruptcy court.
In conjunction with the Qintex announcement, it was disclosed that New Line Cinema Corp. and Chemical Banking Corp. plan to purchase an interest in RHI Entertainment. Chemical Bank will provide the bank loan to purchase the Qintex assets, and New Line will invest $7.5 million in the company.