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'Terminator' rights may change hands again

September 28, 2009 |  3:26 pm

TermSalv

The rights to the Terminator franchise are up for sale yet again.

Derek Anderson and Victor Kubicek, who acquired the science-fiction franchise in 2007 for $25 million and produced this year's sequel "Terminator Salvation," are now looking to sell them partially or outright as several companies owned by the duo work their way through bankruptcy.

Anderson and Kubicek's Halcyon Holding Group has engaged financial advisory firm FTI Capital Advisors, pending bankruptcy court approval, to "evaluate strategic alternatives," according to a statement. Since Halcyon's only valuable asset is the Terminator rights, any deal would involve an investment in, or outright sale, of them.

"We're going to be contacting a variety of studios and independent companies," said Kevin Shultz, senior managing director at FTI. "We think the values are considerably in excess of the purchase price."

Since "The Terminator" was released in 1984, the franchise rights have changed hands more frequently than that of any other major Hollywood film series. When the first movie came out, production company Hemdale Film Corp. owned a 50% interest and director James Cameron sold the other half to producing partner and future wife Gale Anne Hurd for $1.

Carolco Pictures, owned by producers Mario Kassar and Andrew Vajna, bought Hemdale's stake in 1990 for $10 million and released "Terminator 2: Judgment Day" the next year. In 1997, after Carolco went bankrupt, they started a new venture, C2 Pictures, which bought their old company's stake at auction for $8 million and the remaining 50% from Hurd for $7 million.

In 2007, Kassar and Vajna sold the rights to novice producers Anderson and Kubicek in a deal that surprised many in Hollywood.

In a previous bankruptcy court filing, Anderson claimed that the Terminator rights are now worth more than $60 million, more than double what he and Kubicek paid. Shultz said his firm will conduct its own analysis. Such valuations, which are based on forthcoming cash flow from "Salvation," which has yet to be released on DVD, as well as potential further sequels, can vary widely because the performance of future films is so difficult to predict.

Anderson also claimed that Halcyon has received expressions of interest in buying the Terminator rights from several companies, including Sony Pictures, which distributed "Salvation" overseas. A Sony spokesperson declined to comment.

Three companies owned by Anderson and Kubicek that own the Terminator rights and their interests in it filed for bankruptcy last month, triggered by a disputed debt owed to Pacificor, LLC, a Santa Barbara hedge fund that loaned them money to make the purchase, along with working capital.

At the same time, they filed a suit against Pacificor over the disputed debt. That suit has since been dropped due to what a Halcyon spokesperson called "procedural maneuvering." The two remain at odds in bankruptcy court, however.

Halcyon currently owes Pacificor, by far its largest debtor, about $32 million. Any potential sale of the Terminator rights would have to be approved by a bankruptcy judge, who would then determine what portion of the proceeds would go to Pacificor and other debtors.

A Halcyon spokesperson said that the company will pay back all of its debts in full following a Terminator transaction.

Anderson and Kubicek have also sued former Pacificor employee Kurt Benjamin for allegedly pushing their companies into a series of bad decisions that led to bankruptcy. Benjamin has denied the charges. The complaint also blamed "Salvation" producer Moritz Borman for some of the company's problems, but an amended version filed several days later omitted him.

Anderson and Kubicek have been involved in numerous lawsuits during their short film careers, with legal opponents including Borman, MGM and past investors.

Update (5:22 PM): A spokesperson for Halcyon claimed that, in fact, the production company owes Pacificor only $4 million, plus interest and fees. Andy Mitchell, chief executive of Pacificor, maintained that the actual figure is a little over $32 million.

Update (6:33 PM): A previous version of this post said that C2 Pictures bought the 50% stake in Terminator previously owned by Carolco for $7 million. In fact, the purchase was for $8 million.

--Ben Fritz

Related stories:

"Terminator" producers file for bankruptcy

"Terminator Salvation" producers sue investors, could lose franchise rights

On the way to "Terminator Salvation," legal sparks fly

Top photo: Sam Worthington in "Terminator Salvation." Credit: Warner Bros.

Bottom photo: Derek Anderson, second from left, and Victor Kubicek, right, with producer Jeffrey Silver, left, and director McG, second from right.

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