Weinstein Company says it will file for bankruptcy

The Weinstein Company is moving closer to bankruptcy.The studio co-founded by Harvey Weinstein has been crippl...

Posted: Feb 26, 2018 9:53 PM
Updated: Feb 26, 2018 9:53 PM

The Weinstein Company is moving closer to bankruptcy.

The studio co-founded by Harvey Weinstein has been crippled by the sexual harassment and assault allegations that have been leveled against him. Now it appears that a deal to sell the studio's assets is falling apart.

The studio's board of directors said in a letter Sunday night that the would-be buyers were unwilling to provide interim financing to keep it afloat while the deal was finalized.

Without that cash, the company is on its last legs, the board indicated.

The group of investors seeking to buy the assets -- led by Maria Contreras-Sweet, former head of the U.S. Small Business Administration -- have not yet publicly responded to the board.

But a source involved with the talks confirmed that the investors have received the letter.

"They are trying to figure out if there's still a way forward," the source said.

The bankruptcy paperwork has not yet been filed, according to two sources, but it could be filed in the next few days.

In the Sunday night letter, Weinstein Co. accused the investors of an "illusory" bid.

"It is simply impossible to avoid the conclusion that you have no intention to sign an agreement -- much less to close one -- and no desire to save valuable assets and jobs," the letter stated.

It concluded, "We will now pursue the board's only viable option to maximize the company's remaining value: an orderly bankruptcy process."

Variety posted a copy of the letter on Sunday. CNN has not yet obtained a copy of it.

Weinstein was ousted from his role at The Weinstein Company last fall after numerous reports of sexual misconduct. He has been accused of sexual harassment or abuse by more than 60 women.

Weinstein has denied any accounts of non-consenusal sex.

Related: Weinstein Company sale in jeopardy

In the wake of the reports, many of the studio's business partners fled. New business opportunities dried up.

With bankruptry seen as a worst case scenario, the studio sought a buyer. In January it entered into exclusive talks with Contreras-Sweet's investor group. She promoted the idea of a new studio, led by women, with the Weinstein name wiped away.

In the meantime, the existing owners tried to keep the studio's doors open and keep staffers on payroll through a variety of financial maneuverings.

The deal talks were complicated two weeks ago when New York Attorney General Eric Schneiderman filed a lawsuit against Weinstein and his former company.

Schneiderman said that a four-month investigation into sexual harassment found "vicious and exploitative mistreatment of company employees." The suit cites what it calls "egregious" violations of state civil and human rights laws.

The state A.G. said he "will not stand in the way" of a sale if his concerns are addressed. He expressed three concerns: "Any deal must ensure first that victims will be adequately compensated;" that employees will be protected; and that executives who knew about Weinstein's alleged acts "will not be rewarded."

In the wake of the suit, the Weinstein Co. board forced out David Glasser, the company's COO, one of the executives who had been singled out by Schneiderman.

Last Wednesday there was a meeting involving Schneiderman's office and the would-be buyers of the studio. Both sides said it was "productive," indicating that an agreement was within reach.

But then came Sunday's letter from the board about the company's financial crunch.

Amid the lengthy talks -- first about the terms of the deal, then about addressing Schneiderman's concerns -- the troubled studio "simply ran out of money," a person involved in the deal said.

Now there's a lot of finger-pointing going on.

Schneiderman's office said in a statement on Monday that the recent talks had come up with a "clear path forward" on the issues raised by the lawsuit.

For example, Contreras-Sweet's investor group had committed to a victim compensation fund of up to $90 million.

"We are disappointed" that the parties "were unable to resolve their financial differences," Schneiderman's office said. "We will continue to pursue justice for victims in the event of the company's bankruptcy, and our investigation into the pattern of egregious abuse by Harvey Weinstein and his enablers is ongoing."

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Confirmed Cases: 31376

Reported Deaths: 1976
CountyConfirmedDeaths
Marion9132533
Lake3260167
Cass15816
Allen124065
St. Joseph115534
Hendricks111765
Hamilton109691
Johnson1080104
Elkhart99127
Madison58058
Bartholomew47433
Porter47321
Clark45338
LaPorte39921
Tippecanoe3693
Jackson3591
Delaware34933
Howard34517
Hancock31727
Shelby31221
Floyd31238
Boone28135
Morgan25824
Vanderburgh2422
Decatur22231
White2218
Montgomery22116
Clinton2081
Harrison18421
Noble18120
Grant18120
Dubois1782
Greene16723
Warrick16426
Dearborn16221
Monroe15810
Henry1566
Lawrence14222
Vigo1417
Miami1371
Putnam1317
Jennings1264
Orange12422
Scott1163
Ripley1126
Franklin1068
Carroll912
Daviess8116
Steuben792
Kosciusko781
Newton7410
Wabash722
Wayne695
Marshall641
Fayette634
LaGrange602
Jasper541
Washington521
Fulton461
Rush452
Jay430
Jefferson411
Clay391
Pulaski390
Randolph383
Whitley342
Brown331
Sullivan321
Starke313
Owen311
DeKalb281
Knox240
Benton240
Crawford230
Perry230
Huntington222
Tipton221
Wells220
Blackford201
Switzerland190
Fountain172
Posey170
Parke170
Spencer141
Gibson132
Ohio130
Adams121
Warren121
Vermillion90
Martin90
Union80
Pike60
Unassigned0152

Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Confirmed Cases: 110304

Reported Deaths: 4856
CountyConfirmedDeaths
Cook720103304
Lake7615250
DuPage7060340
Kane5645152
Will5117257
Winnebago192550
McHenry139967
St. Clair96671
Kankakee79142
Kendall70919
Rock Island63122
Champaign5567
Madison53353
Boone39316
Sangamon32926
DeKalb3193
Randolph2583
Jackson21910
McLean20410
Ogle1902
Macon18719
Stephenson1872
Peoria1777
Clinton17616
Out of IL1501
LaSalle13910
Union1395
Whiteside13410
Iroquois1304
Coles1159
Warren1140
Unassigned1040
Jefferson10116
Knox940
Monroe9111
Grundy892
McDonough804
Lee771
Cass670
Tazewell673
Henry660
Williamson551
Marion500
Jasper457
Adams441
Macoupin411
Perry410
Pulaski400
Montgomery391
Vermilion391
Morgan341
Christian334
Livingston312
Douglas280
Jo Daviess260
Fayette202
Ford201
Jersey201
Washington180
Mason170
Menard170
Woodford172
Shelby161
Bureau151
Mercer140
Carroll132
Hancock130
Franklin120
Crawford110
Fulton110
Piatt110
Bond101
Brown100
Clark100
Cumberland100
Logan100
Schuyler100
Moultrie90
Wayne91
Alexander80
Henderson80
Johnson70
Massac70
Effingham61
Saline60
Greene50
Marshall50
De Witt40
Lawrence40
Richland30
Stark30
Clay20
Edwards20
Gallatin20
Hamilton20
White20
Calhoun10
Hardin10
Pike10
Pope10
Putnam10
Wabash10
Edgar00
Terre Haute
Broken Clouds
70° wxIcon
Hi: 84° Lo: 66°
Feels Like: 70°
Robinson
Overcast
69° wxIcon
Hi: 84° Lo: 65°
Feels Like: 69°
Indianapolis
Scattered Clouds
67° wxIcon
Hi: 84° Lo: 66°
Feels Like: 67°
Rockville
Broken Clouds
66° wxIcon
Hi: 83° Lo: 65°
Feels Like: 66°
Casey
Broken Clouds
69° wxIcon
Hi: 83° Lo: 66°
Feels Like: 69°
Brazil
Broken Clouds
70° wxIcon
Hi: 84° Lo: 66°
Feels Like: 70°
Marshall
Broken Clouds
70° wxIcon
Hi: 83° Lo: 65°
Feels Like: 70°
Mix of clouds and sun with afternoon storms
WTHI Planner
WTHI Temps
WTHI Radar

Latest Video

Image

Direct to home movies impact theaters

Image

Illinois business prepares to serve customers outside

Image

Girl Scouts offer Lead Your Own Adventure program

Image

Indiana travel teams resume practice

Image

Man survives transplant during pandemic

Image

Dog groomer sees increased business

Image

Business welcomes families back inside

Image

City park activities resume in Robinson

Image

Illinois budget approved

Image

Police investigating hostage situation

WTHI Events