Sale of Weinstein Co. Back on Track, Forestalling Bankruptcy

MANHATTAN (CN) – Days after the implosion of the last deal left it on the brink of bankruptcy, the Weinstein Company is set to be scooped up by a group of investors including former Obama official Maria Contreras-Sweet for half a billion dollars.

An investor group headed by Contreras-Sweet, former head of the Small Business Administration, and billionaire Ron Burkle, reportedly reached an agreement on Thursday to buy most of the studio’s assets, which include the hit cable series “Project Runway” and a catalogue of 277 movies.

“Our team is pleased to announce that we have taken an important step and have reached an agreement to purchase assets from The Weinstein Company in order to launch a new company, with a new board and a new vision that embodies the principles that we have stood by since we began this process last fall,” said Contreras-Sweet in a statement.

The new entertainment firm will reportedly invite most of the Weinstein Company’s 150 employees to join.

Both sides reportedly hammered out the deal in a meeting Thursday mediated by New York Attorney General Eric Schneiderman, the heaviest hitter among the dozen plaintiffs to sue The Weinstein Company over allegations that its namesake carried out a decades-long campaign of sexual harassment.

A bankruptcy protection filing, which the Weinstein Company had said it would file Monday, would have halted the lawsuits. Producer Harvey Weinstein has denied all the allegations against him.

Schneiderman commented on the nearly done deal Thursday. “As I made clear from the start, our office will support a deal that ensures victims will be adequately compensated, employees will be protected moving forward, and those who were responsible for misconduct at TWC will not be unjustly rewarded,” the attorney general said in a statement.

Media outlets have reported that the deal will require the investor group to pay off the Weinstein Company’s debt, which totals roughly $225 million.

“This next step represents the best possible pathway to support victims and protect employees,” Contreras-Sweet said in a statement.

“We consider this to be a positive outcome under what have been incredibly difficult circumstances,” the statement continued.

Schneiderman noted that this deal met his mandate for adequate victim compensation. “As part of these negotiations, we are pleased to have received express commitments from the parties that the new company will create a real, well-funded victims compensation fund, implement HR policies that will protect all employees, and will not unjustly reward bad actors,” the AG said.

Weinstein representatives did not immediately respond to requests for comment Friday afternoon.

If the company does go bankrupt, Schneiderman said his office will continue to pursue justice for victims, noting that the “investigation into the pattern of egregious abuse by Harvey Weinstein and his enablers is ongoing.”

Schneiderman’s Feb. 11 petition for civil penalties seeks an order directing Weinstein to pay restitution and damages, plus civil penalties to the state of New York.

At a press conference on the petition Schneiderman emphasized that he was holding the corporate entities liable, including a requirement that any deal acquiring the Weinstein Company ensure “that company executives who perpetuated or enabled the pervasive sexual misconduct at TWC will not be rewarded.”

Weinstein Company President and COO David Glasser was reportedly fired for cause later that week on Feb. 16.

The 12th lawsuit against Weinstein was filed on Wednesday by Chubb Indemnity Insurance and four affiliates, none of which want any part in defending or indemnifying Weinstein against the other cases.

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