Until recently, Andy Mitchell’s closest brush with Hollywood came in “The Queen of Versailles,” the 2012 documentary about the collapse of a timeshare empire.
The film centered on David Siegel, founder of Westgate Resorts, and his struggles to get out from under crushing debt. Mitchell did not appear in the film, but he was among the debtholders putting the screws to Siegel. His company ultimately took control of Siegel’s timeshare tower in Las Vegas.
For Mitchell, it was a fairly typical assignment. The timeshare firm was a badly damaged asset, and it needed someone to roll up his sleeves and get dirty.
Mitchell, 42, is now taking on an even bigger mess: The Weinstein Co. Mitchell’s firm, Lantern Capital, is poised to acquire the bankrupt mini-studio for $310 million in cash, plus $115 million in project-based debt. A bankruptcy judge may sign off on the transaction as soon as May 8.
Lantern faces the daunting task of restarting the moribund studio while trying to ease tensions with Harvey Weinstein’s harassment victims, some of whom backed a rival bid that would have included a $30 million payout to the accusers.
Adding to the challenge, Mitchell and his firm have no entertainment experience, and are learning the business more or less on the fly. Some in Hollywood see that as a red flag. But those who know Mitchell say it will work out.
“Andy Mitchell is a great guy and a trustworthy person,” says Tom McInerney, who was an early employee of Lantern Asset Management. “They see a business with tremendous assets and potential that they can work alongside to make better.”
Mitchell launched Lantern Capital in 2014, spinning it off from Lantern Asset Management, which had been a subsidiary of Centerbridge Capital Partners.
He teamed with Milos Brajovic, whom he had met when they were young vice presidents at Houlihan Lokey. Mitchell, who grew up in Fort Worth, headquartered the company in Dallas.
According to a former employee, Centerbridge had become a massive company, with $14 billion in assets under management. The Lantern team wanted to go smaller and focus on middle-market investments.
According to a recent regulatory filing, Lantern has 12 employees and $531 million under management. It’s not clear how much equity the company is putting into the Weinstein deal, though a source said the firm is taking on more than $200 million in debt from SunTrust Bank.
In a 2016 interview on “PlayMakers,” a Dallas radio show, Mitchell said that he preferred to stay away from intellectual property and venture-capital style investments in favor of industrial businesses, automotive companies and brick-and-mortar retail. The firm has also invested in a zinc company and a golf course in Houston designed by Tiger Woods.
“We like companies that we can understand,” he said on the show. “You should always invest in a company that a fool can run, because eventually one may. So we try to look at businesses that we can get our head around, that aren’t completely dependent on intellectual property and asset-light type structures, that really have a business model that we can understand.”
Lantern evidently had a change of heart when the Weinstein opportunity came along. Mitchell declined to be interviewed for this story.
Lantern’s backers said that turnarounds are similar across industries.
“What makes Lantern successful … is being nimble,” says the former Lantern employee. “Weinstein is totally fucked. It’s like … who cares? People, assets and cash flow — that’s what makes investments. One of those three — the bad people — are out. So you have assets and cash flow. That’s just math.”
It might not be quite that simple. For one thing, Lantern will have to attract a new management team. It’s not clear that a top-drawer CEO is waiting in the wings. For another thing, there is PR. The company will continue to face pressure from New York Attorney General Eric Schneiderman to compensate Weinstein’s victims.
In a statement last week, Lantern committed to maintaining a “diverse workforce in a safe environment founded on a culture of respect and creativity.” But it will take more than that to assure the public — and the entertainment community — that a page has been turned.