The Weinstein Company announced late Sunday, February 25, that it will file for bankruptcy after plans for a $500 million sale collapsed.
“While we recognize that this is an extremely unfortunate outcome for our employees, our creditors and any victims, the board has no choice but to pursue its only viable option to maximize the company’s remaining value: an orderly bankruptcy process,” the film and TV studio said in a statement to Us Weekly. “Over the coming days, the company will prepare its bankruptcy filing with the goal of achieving maximum value in court.”
The decision came after TWC was unable to finalize a deal to sell its assets to an investor group led by Maria Contreras-Sweet, who ran the Small Business Administration under President Barack Obama from 2014 to 2017. The group had offered to pay about $275 million for the company, in addition to the assumption of $225 million in debt.
Sale discussions came to a halt on February 11 when the New York attorney general’s office filed a civil rights lawsuit against TWC and its cofounders, Bob and Harvey Weinstein. Harvey, 65, was dismissed from the studio in October after more than 80 women came forward to accuse him of sexual harassment or assault, as first reported by The New York Times. He has denied any allegations of non-consensual sex.
TWC recently asked a judge to dismiss a class action lawsuit filed against the studio in December. The federal suit claimed Harvey’s former colleagues enabled his alleged behavior, while the company argued that the film producer acted alone and that most of the alleged incidents occurred more than a decade ago.
Before the bankruptcy news broke, TWC board members sent a strongly worded letter to Contreras-Sweet and one of her backers, billionaire investor Ron Burkle. The letter, which was obtained by Variety, said the studio had been working “tirelessly to finalize an agreement” and accused the bidders of failing to produce a deal that would prevent bankruptcy.
“We have believed in this company and in the goals set forth by the Attorney General. 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,” the letter read. “This board will not let that happen.”
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