Assets of the embattled Weinstein Company are getting a second chance after a deal to buy and re-brand the studio was sealed last night.
A group of investors led by a former Obama administration official has agreed to buy the assets of the the studio co-founded by disgraced producer Harvey Weinstein and relaunch it under new management.
Timeline for Entertainment
- January 29, 2019
The deal struck on Thursday by the former head of the US Small Business Administration Maria Contreras-Sweet and backed by US billionaire venture capitalist Ron Burkle is subject to a 40-day closing period.
Contreras-Sweet said in a statement:
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.
Within three hours the Weinstein Company board of directors confirmed the sale, and released a statement saying:
The deal provides a clear path for compensation for victims and protects the jobs of our employees.
We consider this to be a positive outcome under what have been incredibly difficult circumstances.
The terms of the deal:
Under the deal, Weinstein Company chairman and brother of Harvey, Bob Weinstein, will exit the company, while a board of directors composed mostly of women would be installed.
With the cash injection, Contreras-Sweet, who has no experience in Hollywood, pledges to keep the workforce intact and expand offices in LA and London.
Investors will also acquire the company’s 277-film library.
The deal comes days after the company announced plans to declare bankruptcy on Sunday after a $500m deal with Burkle’s buyers fell through.
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The talks initially broke down when Burkle backed down on providing interim funding of $7 million in upfront capital to keep the company afloat.
The $500 million bid, including $225 million in assumption of debt, was later revived in talks at New York attorney general Eric Schneiderman’s office.
The parties were thought to be close to clinching a deal in early February, but negotiations faltered after the attorney general raised concerns that the deal wouldn’t adequately compensate victims and ensure the future of the company.
As a result, a $90 million fund for victims of abuse by Weinstein is expected to be set up with around $45 million set to be raised by selling off the company’s assets.
In October 2017, sex abuse allegations surfaced against the Hollywood titan Harvey Weinstein, taking social media by storm with the #MeToo movement.
The disgraced film producer, referred to by Meryl Streep as a “God” in the movie world, faces more than 70 allegations of sexual abuse, including rape and death threats, charges, which he denies.
Schneiderman filed a civil suit against Weinstein on Sunday 12 February, following an ongoing four month investigation into the Weinstein Company.
The suit alleges that the Weinstein Company did not take appropriate steps to protect its staff from Harvey Weinstein, flouting New York laws against gender discrimination and sexual abuse.