The Weinstein Company announced in a letter from its board directors on Sunday that it will file for bankruptcy, following a failed acquisition from prospective buyers.
The mini-major film studio, which has been beleaguered since co-founder Harvey Weinstein’s alleged sexual misconduct came to light last October, had been working on an acquisition deal with investors Rob Burkle and Maria Contreras-Sweet, but after attending a meeting with them and New York Attorney General Eric Schneiderman on Sunday, it appears that deal is dead. The NY Daily News reports that Burkle and Contreras-Sweet would not comply with some of their demands, which included implementing a “gold standard” human resources policy.
Deadline got a copy of the full memo from the board directors, which confirms the company will pursue bankruptcy. In it, the board says they hoped the deal would preserve jobs and establish a “victim’s fund” to compensate women who were allegedly sexually abused by Weinstein, as well as comply with an agreement made with AG Schneiderman. It appears the board was not satisfied with Burkle and Contreras-Sweet’s offer:
We have believed in this Company and in the goals set forth by the Attorney General. Based on the events of the past week, however, we must conclude that your plan to buy this company was illusory and would only leave this Company hobbling toward its demise to the detriment of all constituents. This Board will not let that happen. Despite your previous statements, it is simply impossible to avoid the conclusion that you have no intention to sign an agreement – much less to close one – and no desire to save valuable assets and jobs. That is regrettable, but not in our power to change.
While we deeply regret that your actions have led to this unfortunate outcome for our employees, our creditors and any victims, we will now pursue the Board’s only viable option to maximize the Company’s remaining value: an orderly bankruptcy process.
According to Forbes, the Weinstein Co. was already suffering financially before firing Harvey Weinstein on October 8, 2017. Weinstein, who has been accused of sexual misconduct and assault by dozens of women, subsequently resigned from the company’s board.