The Strategist

Weinstein Co. to file for bankruptcy

02/26/2018 - 13:56

The producer company Weinstein Co. is going to file a bankruptcy petition. The company is trying to save its assets from the financial problems that arose when dozens of actresses accused co-founder Harvey Weinstein of sexual harassment, Bloomberg writes.

Georges Biard
Georges Biard
The Board of Directors failed to sell the film studio to a group of investors led by Maria Contreras-Sweet, who ran the US Department of Small Business Administration from 2014 to 2017, a copy of a letter from Weinstein Co. says. The company accused a group of investors of failure of a $ 500 million deal, supported by billionaire Ron Burkle.

"Although we deeply regret that your actions have led to this unfortunate result for our employees, our creditors and any victims, now we will use the only viable option of the board of directors to maximize the company's remaining value: the orderly process of bankruptcy," reads letter from Weinstein Co., addressed to Contreras-Sweet and Burkle.

According to the letter, the talks continued after New York State Attorney General Eric Schneiderman said earlier this month that the offer to buy the studio was unacceptable.

The deal did not provide for "adequate reimbursement, including there was not a sufficient fund to compensate victims." In addition, the deal would have made the victims silent because of "clever non-disclosure agreements," he said.

A group of investors led by Contreras-Sweet said on February 21 at a meeting with the company and the Attorney General of the State of New York that it would work with Weinstein Co. to conclude an agreement on the deal immediately, follows from the company's letter.

After several days of work on the conclusion of the agreement, a group of investors sent Weinstein Co. a document that increased the obligations for the studio and did not include provisions that guarantee payments to employees, the letter said.

In October 2017, journalistic investigations of sexual harassment by Harvey Weinstein were published. Several dozen women accused Weinstein of inviting them to hotel rooms under the pretext of discussing projects and soliciting them. After the publication of the investigations, Weinstein was fired from Weinstein Co.