After the collapse of a deal to sell the Weinstein Company, the television and film studio announced that it will be filing for bankruptcy.
The talks were with a group led by Maria Contreras-Sweet, and the deal was said to be valued at $500 million, with approximately $275 million for the Weinstein Company, and the assumption of $225 million of debt.
Issues of funding in the interim, which the studio required to operate and pay employees, were cited as part of the reason for the deal collapsing.
A letter from the Weinstein Co. to Contreras-Sweet and Burkle stated, “[W]e must conclude that your plan to buy this company was illusory and would only leave this Company hobbling toward its demise to the detriment of all constituents. Despite your previous statements, it is simply impossible to avoid the conclusion that you have no intention to sign an agreement — much less to close one — and no desire to save valuable assets and jobs.”
In a statement to the New York Times, the company said, “While we recognize that this is an extremely unfortunate outcome for our employees, our creditors and any victims, the board has no choice. Over the coming days, the company will prepare its bankruptcy filing with the goal of achieving maximum value in court.”
A civil rights suit was filed two weeks ago by New York Attorney General Eric Schneiderman the Weinstein Co. and its founding brothers. The suit claimed that the studio “repeatedly broke New York law by failing to protect its employees from pervasive sexual harassment, intimidation, and discrimination.”
In a statement announcing the suit, Schneiderman said, “Any sale of The Weinstein Company must ensure that victims will be compensated, employees will be protected going forward, and that neither perpetrators nor enablers will be unjustly enriched.”
It appears that the suit may have influenced the scrapping of the sales deal. It remains unclear how the referenced victims will be compensated if the Weinstein Co. isn’t sold.
A spokesperson for the attorney general’s office said that the deal that was seen by prosecutors had money that was intended for victims instead going to lawyers’ fees.
After the announcement of the bankruptcy, a statement was released by Schneiderman’s office saying, “Over the past two weeks, we had very productive discussions with both parties about accomplishing the Attorney General’s goals of compensating victims, protecting employees, and rooting out those who enabled years of sexual abuse at the Weinstein Company. We are disappointed that despite a clear path forward on those issues—including the buyer’s commitment to dedicate up to $90 million to victim compensation and implement gold-plated HR policies—the parties were unable to resolve their financial differences. We will continue to pursue justice for victims in the event of the company’s bankruptcy, and our investigation into the pattern of egregious abuse by Harvey Weinstein and his enablers is ongoing.”
By Charles Bernstein
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