MANHATTAN (CN) – Only newly resuscitated, the sale of the Weinstein Company to an investor group led by Maria Contreras-Sweet has collapsed again after the discovery of millions of dollars of undisclosed liabilities.
“After signing and entering into the confirmatory diligence phase, we have received disappointing information about the viability of completing this transaction,” said Contreras-Sweet in a statement Tuesday.
The onetime head of the Small Business Administration under President Barack Obama, Contreras-Sweet suggested that the investors will follow the Weinstein Company’s impending bankruptcy before making another move.
“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 said in a statement.
Tuesday’s announcement came less than a week since a tentative agreement was reached for the investor group to spend $500 million to buy $225 million of The Weinstein Company’s debt and commit $275 million to form a new venture.
“I believe that our vision to create a women-led film studio is still the correct course of action,” Contreras-Sweet said.
She added: “I remain committed to working to advance women’s business ownership in all sectors and to inspire girls to envision their futures as leaders of important companies.”
Five days earlier, both parties had announced that the acquisition was underway.
The investment group would have drawn funding from high-profile Democrat fundraiser Ron Burkle and fellow billionaire Len Blavatnik, whose Access Industries conglomerate acquired Warner Music Group for $3.3 billion through an affiliate in 2011.
According to Deadline, the previously undisclosed liabilities reportedly include $27 million in residuals and profit participation, $20 million in accounts payable, and $17 million in a commercial arbitration award.
The board of The Weinstein Company responded to the buyers’ pullout in a statement Tuesday evening.
“The investors’ excuse that they learned new information about the company’s financial condition is just that — an excuse,” the board said in a statement.
“The company has been transparent about its dire financial condition to the point of announcing its own likely bankruptcy last week,” the Weinstein board added.
The now-shuttered acquisition deal would have establishment a victims’ fund amounting to between $80 million and $90 million, a key mandate stressed by New York Attorney General Eric Schneiderman who had reportedly helped broker the deal between the two parties.
Schneiderman, who filed a petition for civil penalties against the Weinstein Company in February, has made multiple statements stressing that any acquisition of the Weinstein Company needed to include provisions to “create real, well-funded victims compensation fund, implement HR policies that will protect all employees, and will not unjustly reward bad actors.”
Schneiderman began the investigation in October 2017, after the allegations against Harvey Weinstein were brought to the fore in a series of exposes by The New York Times and The New Yorker.
Schneiderman’s office has called his investigation into the production studio active and ongoing.
Harvey Weinstein has denied all the allegations against him.