Earlier this week, Core Entertainment Inc., the parent company of American Idol and So You Think You Can Dance, filed for Chapter 11 bankruptcy in New York. On Friday, reports the Wall Street Journal, the company won approval from a bankruptcy judge to tap its lenders’ cash and move forward with its chapter 11 proceedings.
And, according to the paper, a battle is “brewing” between American Idol creator, Simon Fuller, and Core Media over the once mighty company and its assets.
Judge Stuart Bernstein of the U.S. Bankruptcy Court in New York approved Core’s so-called first-day requests, including paying its employees and its taxes.
The company is still negotiating with its lenders and has yet to secure a bankruptcy loan, Core’s lawyers said in court on Friday. “We do expect to sign a restructuring support agreement with those lenders within the next week,” said Core lawyer Matthew Allen Feldman. “We’re actively drafting a plan.”
The court papers show that Core owes about $398 million to first- and second-lien lenders, with whom the company has been negotiating.
Core’s debt load began when Apollo Global Management and 21st Century Fox Inc. took the company private in 2011, the company’s lawyers said in court. Apollo and 21st Century Fox each own a 50% stake in the company.
Core had already been in discussions for months with its lenders when American Idol aired its final episode on April 7. In the first half of 2015, Core suffered a $35.6 million loss in revenue from American Idol and other TV shows owned by the company.
A battle with Simon Fuller is “brewing” WSJ reports. The Idol and SYTYCD creator pushed Core into bankruptcy protection, Core’s lawyer told the court. The company believes Fuller is owed $2.9 million, but Fuller believes he is owed more and has taken steps that could lead to an involuntary winding-up proceeding in the U.K., the Core lawyer told the court.
Fuller is considering partnering with another firm to make a bid for the company, with the vision of reshaping it for the social media age, a person familiar with the matter told WSJ on Thursday.
A Core spokeswoman told WSJ Core had no plans to sell any assets in the bankruptcy process.
Grab your popcorn and pull up a lawn chair kids, this battle is going to be a good one.