NEW YORK (CelebrityAccess) — Weinstein Co., the New York studio co-founded by embattled movie mogul Harvey Weinstein, will file for bankruptcy protection after negotiations over the sale of its assets to a group of investors collapsed on Sunday night.
“While we recognize that this is an extremely unfortunate outcome for our employees, our creditors, and any victims, the Board has no choice but to pursue the only viable option to maximize the company’s remaining value: an orderly bankruptcy process,” the board said in a statement.
According to the Los Angeles Times, the decision to seek bankruptcy protection came after the company’s board of directors failed to reach an agreement with an investor group led by Maria Contreras-Sweet to provide a much-needed infusion of cash. The consortium was also said to include investor Ronald Burkle and Dallas private equity firm Lantern Asset Management, the Times reported.
As early as two weeks ago, the investor consortium was believed to be very close to announcing a deal worth as much as $500 million for TWC. Under the proposed deal, Weinstein Co. was to be renamed and elect a new board of directors with the majority of the board female. The bidders had also promised to establish a fund of at least $40 million to compensate Weinstein’s accusers, the Times reported.
However, on Feb. 11, New York Attorney General Eric Schneiderman threw a shoe into the gears of the sale when he announced a civil rights lawsuit against TWC along with company founders Harvey and Bob Weinstein. Schneiderman criticized some aspects of the proposed sale, including keeping Weinstein Co. Chief Operating Officer David Glasser in place following the sale. Glasser has since been fired “for cause” in an effort to salvage the sale, the Times reported.
According to Variety, the Contreras-Sweet group had met with Schneiderman and had offered a revised bid on Saturday for TWC and said they were unaware that the company was in such dire financial straits. A source close to negotiation told Variety that the investor group was ready and willing to provide a cash infusion to TWC, but only if they had a signed deal in hand.
The bankruptcy is the latest twist in the dissolution of what was once a highly influential company in the film industry, but a widening scandal of sexual misconduct allegations against Harvey Weinstein led to his ouster from the company in October. Weinstein maintains that he only engaged in consensual acts.