Thu, Mar 08, 2018 - Page 10 News List

Woman-led investor group scraps Weinstein deal

Reuters

A female-led investor group that had agreed to buy The Weinstein Co’s assets pulled its offer on Tuesday, after discovering the Hollywood studio’s liabilities were higher than previously disclosed, two sources familiar with the matter said.

Former US president Barack Obama administration official Maria Contreras-Sweet announced in a statement that the deal reached just last week was now off.

The Weinstein Co board responded that it would keep working to “determine if they are any viable options outside of bankruptcy.”

Contreras-Sweet said that she still believed in the vision of a studio led by women and would consider buying assets if they become available in bankruptcy court.

More than 70 women accused the company’s cofounder Harvey Weinstein, then one of Hollywood’s most influential men, of sexual misconduct, including rape.

Weinstein has denied having non-consensual sex with anyone.

The company, which fired Weinstein in October last year, had been planning to file for bankruptcy when Contreras-Sweet struck the deal last week.

The investors found that the company’s debt was US$280 million rather than the US$225 million previously disclosed, one of the sources said.

A second person said that there were previously undisclosed obligations for royalties and other outstanding work payments, accounts payable and a commercial arbitration award.

“After signing and entering into the confirmatory diligence phase, we have received disappointing information about the viability of completing this transaction,” Contreras-Sweet said in the statement.

“We will consider acquiring assets that may become available in the event of bankruptcy proceedings, as well as other opportunities that may become available in the entertainment industry,” she added.

Contreras-Sweet, who headed the Small Business Administration under Obama, last week said her investor group had reached an agreement, with help from the New York State Attorney General’s office, to buy assets from the company to launch a new firm with a majority-female board.

Launched in October 2005, the studio produced and distributed critically acclaimed hits, including The King’s Speech and Silver Linings Playbook, as well as TV series, such as long-running fashion reality competition Project Runway.

New York Attorney General Eric Schneiderman said at the time that he had received commitments that a well-funded victims compensation fund would be created, that new policies would protect employees and that “bad actors” would not be unjustly rewarded.

“We’ll be disappointed if the parties cannot work out their differences and close the deal,” said Amy Spitalnick, a spokeswoman for Schneidermany.

Schneiderman has filed a lawsuit against the company and brothers Bob and Harvey Weinstein, who cofounded the studio, alleging that Harvey Weinstein sexually harassed employees and the company failed to respond.

The lawsuit remains active, Spitalnick said.

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