The Weinstein Company set to file for bankruptcy as sale talks collapse

The film and television studio co-founded by disgraced producer Harvey Weinstein is to file for bankruptcy after talks to sell its assets to an investor group fell through.

In a statement reported by several US newspapers, the Weinstein Company – which counts Django Unchained and The King’s Speech among its box offices hits –  said it had failed to reached a deal with the group led by Maria Contreras-Sweet, who ran the Small Business Administration under President Barack Obama.

Towards the end of last year Contreras-Sweet offered to pay around US$275mln for the company plus the assumption of US$225mln in debt, with plans to turn it into a women-led business.

But that deal began to fall part earlier this month when New York prosecutors filed a civil rights lawsuit against the company, claiming it failed to protect staff from Harvey Weinstein.

“While we recognize that this is an extremely unfortunate outcome for our employees, our creditors and any victims, the board has no choice,” the statement said.

“Over the coming days, the company will prepare its bankruptcy filing with the goal of achieving maximum value in court.”

The company’s three-member board also released a strongly-worded letter it sent to Contreras Sweet and one of her primary backers, billionaire Ron Burkle, on Sunday.

In that letter, the board said it had worked “tirelessly” to try to get the deal over the line, meeting “virtually every demand you imposed”.

According to the letter, the investor group had failed to deliver promised interim funding to keep the 150-employee studio operating while a deal was thrashed out

The Weinstein Company has been trying to stave off bankruptcy since October, when reports first started to reveal decades of sexual harassment allegations against Harvey Weinstein.

Since then, more than 50 women have accused the 65-year-old of sexual harassment, abuse and rape. He has always denied all allegations of non-consensual sex.

Story by ProactiveInvestors