Weinstein company set for bankruptcy as deal collapses

By Anousha Sakoui and Tiffany Kary

The Weinstein Co is set to turn to bankruptcy to try and save its entertainment assets from financial problems that erupted after co-founder Harvey Weinstein was accused of decades of sexual misconduct.

The board failed to sell the film studio to investors led by Maria Contreras-Sweet, who ran the Small Business Administration from 2014 to 2017. The company blamed the investor group for the collapse of the $500m (€406m) bid backed by billionaire Ron Burkle.

“While we deeply regret that your actions have led to this unfortunate outcome for our employees, our creditors and any victims, we will now pursue the board’s only viable option to maximise the company’s remaining value: an orderly bankruptcy process,” Weinstein Co said.

Negotiations had continued after New York Attorney General Eric Schneiderman earlier this month said the offer to buy the studio was unacceptable. The deal lacked “adequate redress, including a lack of a sufficient victims’ compensation fund.” It would also keep victims “muzzled by insidious non-disclosure agreements,” he said.

The furore over cascading allegations that Harvey Weinstein sought sex from actresses invited to hotel rooms on the pretext of discussing their projects encouraged women who had been harassed by powerful men to name and shame their abusers.

The list of top executives and political leaders resigning after such allegations continues to grow globally and includes names from Steve Wynn, founder and former chairman of Wynn Resorts, to former US Senator Al Franken,

investor Dave McClure, formerly of 500 Startups,

and Amazon Studios former chairman Roy Price.

The Los Angeles district attorney even created a special task force to deal with a deluge of sexual abuse claims in the entertainment industry.

While alleged harassment and other misconduct by men in a range of professions has ended some high-profile careers, the Weinstein Co stands out in facing bankruptcy directly because of such accusations.

The studio, creator of Oscar-winning pictures such as The King’s Speech and hit TV shows such as Project Runway, has been reeling from a loss of business since the allegations against its co-founder surfaced.

Mr Weinstein, who faces a wave of sexual-assault claims stretching back to the 1970s, was ousted from his studio in October 2017 after The New York Times and the New Yorker Magazine published accounts in which women accused him of sexual harassment and rape. He has denied any non-consensual sexual activity.

Bloomberg