French pay TV company Canal Plus, in an apparent preemptive move to make sure it gets its hands on the film library of ailing Carolco Pictures, raised its bid for the library to a steep $58 million, prompting Twentieth Century Fox Film Corp. to withdraw its offer for most of Carolco's assets.
The bidding drama took place Tuesday in U.S. Bankruptcy Court in Los Angeles, after Canal Plus initially came in with a $47-million bid for Carolco's library.
In November, Fox bid $50 million--later revised down to $47.5 million--for a larger chunk of Carolco's assets, which included the film library and development rights on some projects and sequels. Representatives of Carolco bondholders have argued since then that Fox bid too little.
Carolco filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in November. The company's film library includes such box-office hits as "Terminator 2: Judgment Day," "Basic Instinct" and "Total Recall." Potential bidders can submit bids until March 5.
Richard Wynne, a bankruptcy lawyer who represents Carolco's creditors committee and Carolco bondholders, said Canal Plus must post $2 million of its bid by Monday as a sign of good faith. He said the bid values the overall company at nearly $80 million, instead of about $60 million under the Fox bid.
Even if Fox decides not to bid again, the deal will prove lucrative for the studio. Under its original deal with Carolco, Fox gets a $1.25-million "breakup" fee if it is outbid by another party.
Carolco was one of Hollywood's major producers of big-budget action films, but it fell on hard times because of high overhead and box-office flops such as "Chaplin." Should Canal Plus buy the library, Carolco's other assets, such as the rights to sequels for "Basic Instinct" and other films, could be sold in separate transactions to raise money to pay off creditors.