- 4 - to the acquisition jointly elected, pursuant to section 338(h)(10), to treat the acquisition of the stock as an asset acquisition. At the time of the acquisition, Technicolor’s primary activities were film processing and videocassette duplication. The film division provided film processing and related services to major film studios. The videocassette duplication division manufactured prerecorded videocassettes for home video and nontheatrical markets. Technicolor, a leading film processing company, had an experienced management team, sophisticated equipment, and proximity to the studios’ filming locations. In addition, personal relationships, between Technicolor’s and the major film studios’ executives, facilitated client development and retention. The film processing market was extremely competitive, and major studios used their strong bargaining power to negotiate large up-front payments (e.g., Technicolor made a $65 million payment to renew a contract with Walt Disney Pictures), volume discounts, “most-favored-nation” provisions,5 and other contractual concessions from film processing companies. Technicolor’s major competitors were Deluxe Laboratories, Inc. 5 Most-favored-nation provisions ensured that a customer would get the same pricing as any other customer ordering the same volume of services.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011