The Weinstein Company’s Deal With Investor Group Collapses

As we previously reported, The Weinstein Company accepted a $500 million investor bid from a group that would lead to a new woman-led company. It would also result in the exits of Harvey and Bob Weinstein. The group was led by Ron Burkle and Maria Contreras-Sweet. However, Variety reports that the deal has collapsed and the investors have backed out.

The latter said in a statement: “We have received disappointing information about the viability of completing this transaction. As a result, we have decided to terminate this transaction.”

As a result of the deal’s collapse, it’s likely that the Weinstein Company will be forced to file for bankruptcy protection. The company has had financial issues after allegations of sexual abuse and harassment against Harvey Weinstein, which were made in October. Bob Weinstein sent a memo to employees that said he would look for other options and denied reports that the company wouldn’t make payroll.

He wrote: “I’m sorry for the terrible news that just came out. There was an article in Deadline saying payroll won’t be met — that is untrue. There are other options we are seeking outside of bankruptcy that may come to fruition. The board is continuing to pursue those options. I will update you on a more frequent basis if I can.”

A source stated that the investors found new information about undisclosed liabilities, including “$27 million in profit participation and residuals, $20 million in accounts payable, and a $17 million commercial arbitration award.” That brings the level of debt to $290 million. Burkle and Contreras-Sweet had been told previously that the debt was in the range of $225 million. However, the Weinstein Company blamed the investors for backing out.

They said in a statement: “The investors’ excuse that they learned new information about the Company’s financial condition is just that — an excuse. The Company has been transparent about its dire financial condition to the point of announcing its own LIKELY bankruptcy last week. We regret being correct that this buyer simply had no intention of following through on its promises. Nevertheless, this Board will not quit. We will continue to work tirelessly — as we have for months — to determine if there are any viable options outside of bankruptcy. In the meantime, we continue to pursue an orderly bankruptcy process to maximize the Company’s value.“