Edwards close to takeover agreement

Mathis Winkler

NEWPORT BEACH -- Inching closer to a takeover of Edwards Theaters

Circuit Inc., lawyers for creditors in the company’s bankruptcy

proceedings announced Monday that they have reached a deal with Edwards

and its likely new owners.

The company, based in Newport Beach, filed for bankruptcy protection

in the U.S. Bankruptcy Court in Santa Ana in September. At the time,

Edwards officials cited a public demand for state-of-the-art stadium

megaplexes and a drop in attendance at older theaters as the reason for

money problems.

In late May, company officials announced Denver billionaire Philip

Anschutz and Oaktree Capital Management LLC, a Los Angeles-based capital

management company, would take control of Edwards Theaters and receive

51% of shares in return for a $56-million investment.

After a bankruptcy court judge approved the deal in late June,

Monday’s agreement between Edwards officials and creditors now makes the

takeover almost final.

Anita-Marie Hill, a spokeswoman for Edwards, said the company hoped

the judge would approve the latest plan sometime on Monday and allow

company officials to bring it to a vote of all creditors.

In a statement, Irell & Manella LLP, the creditors’ law firm, praised

the plan as “vastly superior” to an earlier proposal.

The original plan guaranteed vendors and movie studios between 90% and

100% of debts of about $36 million plus interest.

Under the new agreement, creditors can either get a cash payment of

90% of their claim or recoup 100% under an installment plan.

Lawyers involved in the case could not be reached for comment Monday.

Edwards has also agreed to repay debts to banks of about $215 million

plus interest.

Once the takeover occurs, the Edwards family, which has owned the

company for more than seven decades, will hold preferred stock and 49% of

the shares.

At that time, a new seven-member board of directors, composed of W.

James Edwards III, the company’s current chief executive, and individuals

designated by Anschutz and Oaktree, will assume control.

Company officials have said the reorganized company could emerge from

bankruptcy protection by October.

* Mathis Winkler covers Newport Beach. He may be reached at (949)

574-4232 or by e-mail at [email protected].