Weinstein Co. Spared From Bankruptcy
The company co-founded by disgraced US movie mogul Harvey Weinstein has been bought and will now be run by a largely-female board. An investor group backed by billionaire Ron Burkle has reached a $500 million deal with the Weinstein Co. that will spare the troubled company from bankruptcy.
The deal came together in a marathon negotiation Thursday in the office of New York Attorney General Eric Schneiderman. The Weinstein Co. board, including chairman Bob Weinstein, sat down with Burkle and his partner, former Small Business Administration chief Maria Contreras-Sweet, with Schneiderman helping to seal the deal.
“Our team is pleased to announce that we have taken an important step and have reached an agreement to purchase assets from The Weinstein Company in order to launch a new company, with a new board and a new vision that embodies the principles that we have stood by since we began this process last fall,” Contreras-Sweet said in a statement.
The negotiations continued over minor points even after Contreras-Sweet released her statement. Three hours later, the Weinstein Co. board confirmed the deal.
“We are pleased to announce that we have entered into an agreement to sell the assets of The Weinstein Company to an investor group led by Maria Contreras-Sweet and Ron Burkle,” the board said. “The deal provides a clear path for compensation for victims and protects the jobs of our employees. We greatly appreciate the efforts of Attorney General Schneiderman and his staff, Maria Contreras-Sweet, Ron Burkle and his team at Yucaipa for bringing about this agreement. We consider this to be a positive outcome under what have been incredibly difficult circumstances.”
The deal comes after the transaction nearly died twice in the space of two weeks. On Feb. 11, the buyers almost walked away when Schneiderman’s office filed a discrimination complaint that sought oversight and conditions on the sale. After talks restarted, the Weinstein Co. announced on Feb. 25 that they were backing out and pursuing bankruptcy, and accused Burkle and Contreras-Sweet of failing to negotiate in good faith.
Contreras-Sweet will have the challenge of stabilizing a company that went into freefall shortly after the New York Times reported on history of sexual harassment by Weinstein on Oct. 5. The company, already ailing, was forced to cancel releases and saw deals for TV shows collapse. The company has been hit with numerous lawsuits from actresses alleging complicity with Weinstein’s harassment, and from business partners alleging non-payment of bills. The company was forced to sell off Paddington 2 just to make payroll, and its American Express corporate credit cards were frozen.