The planned bankruptcy filing represents the formal demise of an empire, a once-renowned film studio behind scores of successful Hollywood movies, including “The King’s Speech,” “The Iron Lady” and “Django Unchained,” since its founding in 2005. Its dissolution, after Weinstein was accused of sexually assaulting women for years, underscores the extent to which the #MeToo movement has upended the industry.
The New York-based studio had been in talks with an investor group led by Maria Contreras-Sweet, a former head of the Small Business Administration under President Barack Obama. Contreras-Sweet placed a $500 million bid, backed by billionaire investor Ronald Burkle, among others, to purchase the Weinstein Co., including an assumption of $225 million in debt, according to Variety. She proposed retaining the company’s employees and installing a majority-female board of directors, with Contreras-Sweet as chair.
But that deal began to crumble two weeks ago when New York Attorney General Eric T. Schneiderman filed a civil rights lawsuit against Weinstein, his namesake company and his brother and co-founder, Bob. The lawsuit accused the disgraced Hollywood mogul of “vicious and exploitative” treatment of employees and condemned the film studio for failing to protect his accusers.
Weinstein Co., which was already debt-ridden, has been in serious financial straits ever since reports emerged in October in the New York Times and the New Yorker detailing allegations of sexual abuse spanning decades. More than 70 women have since accused Weinstein of sexual misconduct, including rape, which helped propel women to accuse Weinstein of sexual misconduct across multiple industries.
Schneiderman filed his lawsuit in large part to intervene in the company’s sales talks. The attorney general lambasted Contreras-Sweet’s plan to make the studio’s then-chief operating officer, David Glasser, the head of the company. Under this appointment, the lawsuit said, employees “would be reporting to some of the same managers . . . who failed to investigate (Harvey Weinstein’s) ongoing misconduct or adequately protect female employees” from him. As part of the deal, Schneiderman demanded that victims be properly compensated and that the attorney general’s office have oversight over the company.
Then, on Feb. 16, the Weinstein Co.’s board of directors announced that it had unanimously voted to fire Glasser for “cause,” without offering further explanation. (Glasser has threatened to sue the remaining board members, alleging wrongful termination, retaliation, breach of contract and defamation, according to the Hollywood Reporter).
On Wednesday, Contreras-Sweet and Burkle met with Schneiderman in his New York office to discuss the terms of the sale in the hope of reviving it. It now appears those talks were unsuccessful.
On Sunday, the board also wrote a letter to Contreras-Sweet and Burkle, saying they had worked “tirelessly to finalize an agreement to present to the Attorney General for his approval,” according to a copy of the letter obtained by the Hollywood Reporter. The letter said Contreras-Sweet failed to deliver on interim funding the Weinstein Co. needed to run its business, and failed to include a promised provision for “ ‘gold standard’ human resources policies.”
“We have believed in this Company and in the goals set forth by the Attorney General,” the board’s letter stated. “Based on the events of the past week, however, we must conclude that your plan to buy this company was illusory and would only leave this Company hobbling toward its demise to the detriment of all constituents.”
The company plans to file for Chapter 11 bankruptcy, according to the Wall Street Journal, and would draw a plan for paying off creditors.
Weinstein was fired by his namesake company Oct. 8 and soon after expelled from the Academy of Motion Picture Arts and Sciences, the organization behind the Oscars. Police and prosecutors in Los Angeles, Beverly Hills, New York and London are investigating possible criminal charges against Weinstein. He has repeatedly denied all accusations of nonconsensual sex.
Since the scandal exploded, key partners of Weinstein Co., including Amazon Studios and Netflix, have pulled projects or cut ties with the company. (Amazon’s founder, Jeffrey P. Bezos, owns The Washington Post.)
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