By Pacific Coast Business Times Staff Friday, August 21st, 2009

Santa Barbara-based hedge fund Pacificor has grappled with hard-money lenders and auto-parts firms. Now it’s going up against the Terminator.

The producers who own the Terminator franchise – whose “Terminator Salvation” film, released earlier this summer, raked in $370 million at the box office but hasn’t yet come out on DVD – filed for Chapter 11 bankruptcy on Aug. 17 after filing a lawsuit the same day alleging that Pacificor slapped an illegal lien on one of their companies and choked their ability to pay their debts.

In their lawsuit filed in Los Angeles County Superior Court, producers Derek Anderson and Victor Kubicek say Pacificor loaned one of their companies, Halcyon Holdings, $30 million to buy the rights to the Terminator franchise. They say that Pacificor later lent Halcyon $9 million more, according to the complaint.

Pacificor demanded that Halcyon make a payment on those later loans by Aug. 3, according to the complaint. Halcyon couldn’t do it, but the producers told Pacificor they were trying to work out financing, according to the complaint.

When the payment didn’t come, Pacificor slapped a lien – a hold on assets – on Dominion Holdings, a company owned by Anderson and Kubicek that received their pay for producing. The two say they used Dominion to pay creditors.

In their lawsuit, the producers allege their agreements with Pacificor were between Halcyon and the hedge fund and didn’t involve Dominion, so Pacificor had no right to put the lien on Dominion. The producers allege Pacificor’s move was designed to stop them from paying back their debts and was a “desperate and deliberate attempt to seize ownership and control” of the Terminator franchise.

But Andy Mitchell, chief executive and chief investment officer at Pacificor, said his firm has done nothing illegal and is only protecting its investment.

“[Y]ou should see Pacificor as a savvy investor that is taking aggressive action to protect its rights and maximize its gain,” Mitchell said via e-mail. “It should not be surprising that we expect to come out on top when the dust clears.”

The same day Anderson and Kubicek filed their lawsuit, their companies filed for Chapter 11. Halcyon listed between $50 million and $100 million in debts and assets.

This isn’t the first time that Pacificor has played hardball with its investments.

It now owns a controlling block of Dura Automotive Systems, a Michigan-based automobile parts supplier that filed for Chapter 11 in October 2006. In that case, Pacificor filed a plan to wipe out common stockholders and take Dura private by backstopping a $160 million equity raise. The plan encountered strong criticism from shareholders, and a late 2007 credit crunch killed it. But by mid-2008, Pacificor succeeded in taking control, wiping out common stockholders but keeping the company public.

Pacificor also tussled with Quality Home Loans, an Agoura Hills-based hard-money lender that filed for bankruptcy in 2007. Pacificor had moved to the buy the company, but the transaction allegedly never closed and Quality filed for bankruptcy shortly afterward.

Pacificor claimed it was owed $42 million in that case, and Mitchell said Pacificor has been paid back in cash all but $12 million of that and continues to go after the rest.

• For more coverage, read the Aug. 28 print edition of the Business Times.

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