Topic: Interesting Muvico Article
Phenomenal Film Handler
From: Davie, FL, USA
Registered: May 2002
posted 01-30-2006 07:22 PM
Posted on Sat, Jan. 28, 2006
Reel problems: Muvico founder, CEO leaves and suesBY ELAINE WALKERewalker@MiamiHerald.comHamid Hashemi, the founder and chief executive of Muvico Theaters, has been forced out in a power struggle with the Fort Lauderdale company's majority owners, according to court documents.
The fight became public in litigation Hashemi filed earlier this month in Broward Circuit Court against Muvico. The litigation charges Muvico with breach of contract for failing to go forward with a $15 million deal to sell Hashemi Premier Aviation, the private jet servicing business next to Muvico's Boca Raton theater. The deal was to close by the end of December.
But the lawsuit also offers a window into the operations of the privately held theater company and describes a bigger falling out between Muvico's financial partners and Hashemi, the driving force behind the development of the brand since its inception in 1984 and its shift in 1995 to the upscale, megaplex format that has become its calling card.
As president and chief executive, Hashemi built Muvico into a nationally-recognized chain known for its themed movie palaces and abundance of consumer amenities ranging from babysitting to valet parking and VIP balcony seats complete with a gourmet restaurant. That niche market approach helped the theater chain remain strong during the early 2000s when the majority of the major theater operators in the country were forced into bankruptcy. Muvico's theaters in Davie, Boca Raton and Hanover, Md., consistently rank among the top grossing theaters in the country.
Yet Hashemi and his financial partners apparently were at odds over the future direction of the company, according to court documents. What role these disagreements played in the chief executive's departure are unclear.
Hashemi and his wife, Deane, who served as Muvico's vice president of operations, are no longer employed by the company as of last Saturday, said Tom Angelo, Hashemi's attorney. Hashemi still remains a minority shareholder in Muvico, Angelo said.
While Hashemi and his attorney declined to discuss any details of the separation, the story according to the lawsuit begins in November 2003 when a decision was made by Muvico's management board to look into selling the company. Several buyers emerged, including AMC Theaters, but by late 2004 all had ''lost interest'' in pursuing the sale or failed to meet the ''financial hurdles'' of Muvico's board.
Hashemi then put together a proposal in early 2005 to buy out the investors in Muvico Holdings and take back control of the company, according to the lawsuit. Over the years, Hashemi's ownership stake had been diluted to a minority position as he brought in venture capital firms, such as BCI Partners and Nautic Partners, to help fund the company's expansion.
But Hashemi's buyout offer prompted a competing offer from another board member, Theodore Horton, whose company AmStar Entertainment operates movie theaters in the Southeastern United States. The board chose to accept Horton's bid, although it was for a lower purchase price, according to Hashemi's suit.
As Muvico's chief executive and president, Hashemi was concerned that Horton's proposal 'had a vision of providing a lower quality and lower service product under the Muvico brand, i.e. to provide a `K-Mart' vs. 'Neiman Marcus' product and service,'' according to the lawsuit.
Hashemi also raised concerns about the lack of funding for the buyout and the potential that the deal could put Muvico in default on many of its existing contracts with landlords and vendors, according to court documents.
Neil Bretan, Muvico's outside general counsel, and Michael Whalen, Muvico's chief operating officer, both declined to discuss the specifics raised in Hashemi's lawsuit or the details surrounding his departure. But Bretan took issue with the overall description of events provided in Hashemi's lawsuit.
''A number of different options for the future of the company have been explored at various times,'' he said. ``People have their own view of which direction the company should be going at any one time.''
Muvico's executives promised it will remain business as usual at the company, which operates 12 theaters, 10 of which are in Florida.
''Clearly over the years Hamid has been the visionary that created the concept and nurtured it, but over time that vision has become institutionalized,'' Bretan said. ``There exists a Muvico apart from Hamid that will continue to prosper.''
Muvico is currently not actively soliciting or entertaining any bids for the company, he said. And there have been no decisions about replacing Hashemi as president and chief executive.
Joe Amaturo, the company's largest shareholder, took over as chairman of the board. Amaturo has a background in broadcasting and over the years he has owned 22 radio and television stations in 10 states, including Florida. Amaturo has been an investor in Muvico since the early days, but has not been active in the daily running of the company.
Muvico plans to move ahead with the aggressive development plans that are currently in the works. The company has commitments to build seven new theaters for a total of 140 screens between 2006 and 2008. The biggest of these is Muvico Xanadu, a 26-screen theater with 6,500 seats at Mills Corporation's project at the Meadowlands in Secaucus, New Jersey. This is expected to be the largest movie theater in the country.
While Muvico intends to go ahead with plans for a theater at Kendall Town Center, the company is not sure if it will build a new prototype Muvico Empire, which was expected to combine a movie theater and entertainment complex in one location, Whalen said.
One thing is certain, the new theaters will all maintain the Muvico tradition, Whalen said. ''The brand is a special brand and it's one of a kind,'' he said.
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Phenomenal Film Handler
From: Denton, MD
Registered: Feb 2002
posted 03-17-2006 04:51 AM
More drama from Ft. Lauderdale:
Posted on Wed, Mar. 15, 2006
By ELAINE WALKER
COURTS - Fired Muvico chief exec files suitThe fight between Muvico and its founder escalated with the filing of a shareholder rights lawsuit. The goal is to put the company into receivership.Muvico Theaters founder Hamid Hashemi and his wife filed a shareholder rights lawsuit against the company, its owners and key management on Tuesday in Broward Circuit Court.
The suit filed on behalf of Muvico's minority shareholders seeks to have the privately held theater company placed into receivership because of ''mismanagement'' by the team that remains at the helm since the Hashemis were fired in January.
''We want to get somebody who will run the company without the bias or animosity that currently exists,'' said Gerald Richman, the Hashemis' attorney. ``The company is going to be badly injured by what management has done. They have changed the direction of the company.''
The lawsuit cites actions by ownership, including the failure to consider Hashemi's bid to buy the company in conjunction with Lennar Chief Executive Stuart Miller or to renew negotiations with AMC Theaters, which previously submitted a bid for Muvico.
Tuesday's lawsuit marks an escalation in the fight between Muvico's financial partners and Hashemi, the driving force behind the development of the brand since its inception in 1984 and its shift in 1995 to the upscale, megaplex format.
Hashemi already filed suit against the company in January for failing to go forward with a $15 million deal to sell him Premier Aviation, the private jet servicing business next to Muvico's Boca Raton theater.
His wife, Deane Hashemi, previously vice president of operations, sued the company last month in federal court for violating her rights under the Family and Medical Leave Act.
But Tuesday's suit accused Muvico's owners and management of self-dealing and breaching their duties to act in the best interest of the company's minority shareholders. Hamid Hashemi owns 12.5 percent of Muvico Holding, Deane Hashemi owns 2.5 percent, and there are about another 10 minority shareholders.
''I regret that things have gotten to this point,'' said Hamid Hashemi, who until his firing served as Muvico's president and chief executive. ``I really believe that what's going on in the company is not in the best interest of anyone.''
John Spano, Muvico's vice president of corporate communications and human resources, said the company would not discuss litigation.
''We are very confident that the changes we have made are for the betterment of Muvico as a whole,'' Spano said. ``The senior executive team is continuing to focus on building the brand of Muvico and growing the company.''
Hashemi's newest suit also sheds more light on his attempt last year to buy the nationally recognized chain known for its themed movie palaces and abundance of consumer amenities. Muvico management had decided in late 2003 to pursue a sale of the company and ultimately received a bid from AMC Theaters. No deal was ever finalized, although AMC has recently resurfaced with potential interest, according to court documents.
In late 2005, Hashemi submitted his own bid to buy Muvico, which was backed by Muvico's current lender and Miller, according to court documents. Miller was going to be putting $58 million of new cash equity into the deal. Miller declined to comment for this article.
The lawsuit argues that the bid never got a fair hearing, even though it was a better deal for Muvico than a competing bid submitted by another board member, Ted Horton, and AmStar Theaters. Although Horton's bid was selected, the company never completed a deal.
Hashemi's deal was for $136 million, while Horton's was for $125 million, Richman said. But he argues that the deals were not really comparable.
Hashemi's deal included the $58 million in cash equity and provided the company with $25 million in liquidity to find future growth, according to court documents. Hashemi's deal included $65 million of senior debt, compared to $93 million in the Horton deal. The Horton deal also did not provide capital for future growth and required additional funding to be raised after the deal, the lawsuit said.
Horton's bid intended to cut costs and ''lower the quality of the Muvico brand,'' ultimately ''damaging Muvico's identity and lowering Muvico's value and the return to Muvico unit owners,'' according to court documents.
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