The New York studio co-founded by disgraced producer Harvey Weinstein, Weinstein Co.is set to file for bankruptcy protection after talks to sell its assets to an investor group collapsed. A statement was issued by the company’s board of directors that said, ‘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 the only viable option to maximize the company's remaining value: an orderly bankruptcy process.”
The decision came after the board was unable to strike a deal to sell the studio to an investor group led by Maria Contreras-Sweet. After the deal, Weinstein Co. was to be renamed under a new board of directors, majority of which would be composed of women. The bidders had promised to raise at least $40 million for a fund to compensate Weinstein's accusers.
The bid was backed by billionaire investor Ronald Burkle and Dallas private equity firm Lantern Asset Management which would have given Contreras-Sweet's consortium control of Weinstein Co.'s assets in a deal worth about $500 million.
However, the New York attorney general's office filed a civil rights lawsuit against Weinstein Co. and its co-founders. Attorney General Eric Schneiderman also criticised the proposed sale and questioned the existence of the promised victims fund based on documents he had reviewed.
After the events however, Weinstein Co’s board of directors issued a letter to Burkle and Contreras-Sweet that read, “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.”
