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SFX to buy Livent assets
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June 1, 1999: 9:54 a.m. ET
Trouble theater company gets undisclosed amount of cash, warrants
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NEW YORK (CNNfn) - Livent Inc. has agreed to sell most of its assets to entertainment and promoter SFX Entertainment Inc., a move that will help the financially battered theater troupe begin tackling its huge mound of unpaid debt.
Under the agreement, SFX (SFXE) will acquire Livent (LVNTF) theaters in New York, Toronto and Chicago, rights to Livent's current productions "Fosse," "Ragtime" and "Phantom of the Opera," as well as productions that are already being developed but haven't seen the curtain go up yet.
Not included are the Ford Center for the Performing Arts in Vancouver or Livent's Toronto headquarters, though SFX said it plans to lease space there.
SFX will pay for the agreement in cash, deferred payment rights and SFX warrants. More specific financial terms were not disclosed by either company, although published reports last week pegged the deal at approximately $100 million.
"Livent's core assets and creativity remain strong, and our people are doing wonderful work," said Livent Chairman and Chief Executive Roy Furman in a statement. "We anticipate that SFX will be able to realize the full potential of our shows, theaters and personnel, and to build on Livent's creative successes," he said.
While the asset sale will help the financially troubled firm pay off some of its creditors, it won't necessarily change its precarious legal situation.
Livent was forced to file for bankruptcy in November after alleged accounting irregularities involving millions of dollars in fake revenue were discovered on the entertainment company's books scanning an eight-year period. Former co-owners and founders Garth Drabinsky and Myron Gottlieb are the subject of a C$225 million (US$150.8 million) lawsuit filed by Livent, and have counter-sued for C$200 million (US$134 million).
U.S. prosecutors filed criminal charges against the two founders in January; the two men deny any wrongdoing.
Any agreement to buy any part of Livent will have to meet with approval by the federal Bankruptcy Court in Manhattan, as well as from other regulators. If that happens, the agreement will be finalized on Sept. 30.
Some of Livent's creations are among the top nominees for the 53rd annual Tony awards this Sunday evening in New York. "Parade" received nine nominations, while "Fosse" received eight; both shows are nominated for best musical.
Livent has also produced such critically acclaimed productions as "Kiss of the Spider Woman," "Showboat" and "Barrynore."
SFX shares closed up 1-1/8 at 54-7/16 Friday. 
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