According to The New York Times, the Weinstein Company will file for bankruptcy now that its latest acquisition deal has fallen through. In a statement issued Monday, TWC’s board said it has “no choice”:
While we recognize that this is an extremely unfortunate outcome for our employees, our creditors and any victims, the board has no choice. Over the coming days, the company will prepare its bankruptcy filing with the goal of achieving maximum value in court.
The embattled production company had been looking for a buyer since last fall, after news broke of a series of sexual assault and harassment allegations against Harvey Weinstein. Last October, the private equity firm Colony Capital, which has a history of rescuing flailing organizations, withdrew its offer after finding more “disorder” at TWC than originally anticipated. Lionsgate was among the other potential buyers, but an investor group led by former Small Business Administration head Maria Contreras-Sweet edged out the competition by offering to keep the studio and its staff intact. The terms of sale included a multimillion-dollar fund for survivors and “a mediation process for reaching settlements,” as well as a majority-female board.
But the acquisition hit a bump in mid-February when New York attorney general Eric Schneiderman filed a lawsuit against the Weinstein Company over civil rights abuses, such as allegedly fostering an environment in which Harvey Weinstein was allowed to openly threaten employees. Schneiderman wanted certain assurances from the Contreras-Sweet group before the sale could move forward, including “strict oversight of the company’s employment practices.” The buyers initially balked at the idea, but still met with Schneiderman last week to try to reach a new deal. Those talks seem to have stalled, as the Contreras-Sweet group never offered up the “interim funding” that would have allowed the Weinstein Company to keep operating while the buyout went through.