Weinstein Company to Declare Bankruptcy After Sale Collapses
The Weinstein Company announced Sunday that a potential deal to sell the embattled studio fell through following the New York Attorney General’s civil rights lawsuit. The Hollywood giant is set to declare bankruptcy. The announcement comes several months after the studio’s co-founder, Harvey Weinstein, was fired following a deluge of accusations of sexual assault and harassment.
“The Weinstein Company has been engaged in an active sale process … Today, those discussions concluded without a signed agreement,” the Weinstein Company said in a statement (via Reuters). “The Board has no choice but to pursue its only viable option to maximize the Company’s remaining value: an orderly bankruptcy process.”
Deadline reports that the Weinstein company blamed potential buyers Ron Burkle and Maria Contreras-Sweet, in a separate letter, for failing to purchase the film and television production company. “We must conclude that your plan to buy this company was illusory and would only leave this Company hobbling toward its demise to the destriment of all constituents,” the letter read (via The Hollywood Reporter).
Although all parties agreed that a sale was needed as quickly as possible to salvage the company, “instead, late last night, you returned to us an incomplete document that unfortunately does not keep your promises of February 21, including with respect to the guiding principles set forth by the Attorney General … You added all new contingencies relating to David Glasser, the former employee of The Weinstein Company who was recently terminated for cause,” the board wrote to Burkle and Contreras-Sweet.
The Weinstein Company began looking to sell last fall amid the allegations against Weinstein. In December, they received approximately 20 offers, which were narrowed to six potential buyers. The highest offers were about $500 million, though as the Wall Street Journal reported, about half of that price would be the assumption of debt. The offers were also low enough that the studio’s owners – including Weinstein’s brother, Bob – wouldn’t receive any cash from the sale.
While the Weinstein Co. catalog encompasses acclaimed television shows and movies, it had already borrowed hundreds of millions of dollars against its library, according to Variety. After the sexual assault scandal, the Weinstein Co. was grappling with debt, legal bills, operating expenses and cut several films it could no longer afford. The studio was forced to sell the family film, Paddington 2, to Warner Bros. in order stay afloat.
Weinstein was fired from the Weinstein Company last October, after reports in The New York Times and New Yorker detailed his decades-long history of sexual misconduct. The scandal served as a tipping point of sorts, leading to a cascade of similar allegations that spread throughout Hollywood and other industries.
Additional reporting by Jon Blistein