Troubled AME Inc. Says It Has a Potential Buyer

AME Inc. in Burbank has a potential buyer, which would enable the video post-production firm to emerge from Chapter 11 bankruptcy protection.

Image Technology Acquisition Corp. has offered $12 million for AME, according to John W. Hyde, AME’s bankruptcy trustee.

Hyde has recommended that the court approve the offer, which was made in a filing at federal Bankruptcy Court in Los Angeles last week.

Hyde declined to say who Image Technology represents, but said its bid for AME is backed by a $3-billion New York investment firm. The investment group doesn’t include any current AME executives, Hyde said. However, “it is anticipated that they will remain at the company in their present roles,” he said.

Hyde is chief executive of MCEG Sterling Entertainment Inc., a Century City movie and video distribution firm that has a consulting division for struggling companies.

He has been overseeing AME’s reorganization since the company filed for Chapter 11 last July 22.

Under Chapter 11, a company keeps operating, but is protected from creditors while it reorganizes under the supervision of a bankruptcy judge.

Hyde said the Image Technology offer is for all of AME’s $4 million of accounts receivable, or money due from customers, its property and $100,000 of cash. Any receivables in excess of $4 million would go to pay creditors.

Two other bidders for AME have also emerged. They are AME founder Andrew McIntyre and All Post Inc., a company headed by former AME President Larry Kingen.

McIntyre and Kingen also didn’t return phone calls seeking comment. Additional bidders could come forward when the sale goes before the Bankruptcy Court.

AME, which specializes in rapidly making video duplicates of movies and TV shows for mass distribution, was once the largest video post-production firm in the business.

It got into trouble after a disastrous $109-million leveraged buyout by an investor group in 1989.

In a leveraged buy-out, assets are purchased with borrowed money and repaid from operations or by selling assets.