Investor Group Acquires Control of Image11 Jan, 2010 By: Erik Gruenwedel
Financially challenged Image Entertainment Jan. 11 said it completed the sale of $22 million in preferred stock to affiliates of a San Francisco-based investment group.
As a result of the previously announced sale of 22,000 shares of newly authorized Series B and 196,702 shares of Series C preferred stock to certain affiliates of JH Partners LLC, the investors acquired majority control of the Chatsworth, Calif.-based home entertainment company, including four board seats.
Image said it would use $15 million of the net proceeds, along with the issuance of 3.5 million shares of common stock, to repay in full and retire its senior secured convertible note due 2011. The distributor had been delinquent on a $4 million payment due on the note.
It wasn’t immediately clear if JH Partners would institute a change in management of Image, which is currently headed by president and long-time CFO Jeff Framer.
Framer, in a statement last month when the deal was announced, said the new investors bring a wealth of entertainment industry experience to the table, and, more importantly, access to sufficient capital to allow the company to continue growing.
In addition to maintaining a distribution strategy aimed at marketing cast-driven, below-the-radar feature films, Image also has contended with the unexpected passing of actress Brittany Murphy, who stars in thriller Across the Hall, which Image is releasing on DVD and Blu-ray Disc Jan. 19.