The Weinstein Company has said it will file for bankruptcy after talks for a sale with an investor group fell through, the company announced late Sunday.
An investor group led by Maria Contreras-Sweet had placed a roughly $500 million bid to buy the company that would have involved the assumption of $225 million in debt, Variety reported earlier in February. The talks between the Weinstein Company and the investor group halted abruptly, however, when on Feb. 11 the New York attorney general’s office filed a lawsuit accusing the studio of creating a “toxic environment” that enabled Harvey Weinstein’s sexual harassment of female employees. (Weinstein has repeatedly denied allegations of nonconsensual sex.)
The Weinstein Company had floundered since allegations against Harvey Weinstein surfaced in October. According to the New York Times, the company had attempted to tide itself over until the sale through loans from private equity firms. That effort failed, and the company sold off North American distribution rights to the movie Paddington 2.
In a sharply worded letter obtained by the Hollywood Reporter to Contreras-Sweet and Ronald Burkle, one of the investors backing the bid, the Weinstein Company’s board said the deal had finally fallen through because Contreras-Sweet’s team had not produced the funding it promised to keep the studio operating while the deal was finalized. The Weinstein board also said that Contreras-Sweet had failed to provide “any provision for the ‘gold standard’ human resources policies [she] promised” and laid out new conditions for the sale that could have added months to the process.
Eric T. Schneiderman, New York’s attorney general, had also called earlier this month for Contreras-Sweet to guarantee the deal would involve adequate financial compensation for Weinstein’s victims, as well as protections for the employees who remained and a promise that those who “enabled” Weinstein’s behavior did not profit from the sale. Contreras-Sweet and Burkle met with Schneiderman on Wednesday to discuss the terms of the sale, according to the Washington Post. In the letter obtained Sunday night, the Weinstein board wrote that Contreras-Sweet’s terms of the sale would not “keep your promises … with respect to the guiding principles set forth by the Attorney General.”
“We have believed in this Company and in the goals set forth by the Attorney General,” the board’s letter said. “Based on the events of the past week, however, we 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.”