The Weinstein Co. Files for Bankruptcy Protection

As expected, The Weinstein Co. has filed for bankruptcy protection in Delaware – five months after allegations of improper sexual behavior by co-founder and co-chairman Harvey Weinstein derailed the venerable studio/distributor.

TWC reportedly is set to sell its assets to Dallas-based investor group Lantern Capital Partners.

“Under the agreement, Lantern will purchase substantially all of the assets of [TWC], subject to certain conditions, including approval of the bankruptcy court,” TWC said in a statement reported by NPR. “The [TWC board] selected Lantern in part due to Lantern’s commitment to maintain the assets and employees as a going concern.”

Notable to the deal: removal of non-disclosure agreements allegedly used by Harvey Weinstein to silence his female accusers.

“The company expressly releases any confidentiality provision to the extent it has prevented individuals who suffered or witnessed any form of sexual misconduct by Harvey Weinstein from telling their stories,” read the statement.

Earlier this month, an investor group led by former Small Business Administration head (under President Obama) Maria Contreras-Sweet and investor Ron Burkle, had agreed to pay $500 million for the TWC, which included assumption of $225 million in debt.

That deal fell apart reportedly after additional liabilities totaling more than $60 million were discovered.

The Weinstein Co. Sale Off Again as New Fiscal Liabilities Emerge

The rollercoaster sale of The Weinstein Co. has apparently gone off the rails again after buyers reportedly discovered undisclosed liabilities totaling more than $60 million.

The setback could see the famed studio/distributor (and home entertainment unit) co-founded by Bob and Harvey Weinstein filing for bankruptcy, putting the jobs of 130 people in doubt, according to The Los Angeles Times.

TWC troubles began last year after Harvey Weinstein was accused of improper sexual behavior, including rape, by dozens of accusers – charges he denies.

The buyers, spearheaded by former Small Business Administration head (under President Obama) Maria Contreras-Sweet and investor Ron Burkle, had agreed to pay $500 million for the TWC, which included assumption of $225 million in debt.

Contreras-Sweet envisioned running the company with a female-centric board of directors, among other management moves.

“All of us have worked in earnest on the transaction to purchase the assets of the Weinstein Company. However, after signing and entering into the confirmatory diligence phase, we have received disappointing information about the viability of completing this transaction,” Contreras-Sweet said in a statement. “As a result, we have decided to terminate this transaction.”

New fiscal liabilities reportedly included $20 million in accounts payable, $17 million due in an arbitration award, and $27 in residuals, according to The Times.

The Weinstein Co. Board Confirms Asset Sale

Maria Contreras-Sweet, former head of the Small Business Administration in the Obama Administration, has reached an agreement with the New York State Attorney General’s office to purchase The Weinstein Co. – less than a week after the embattled studio’s board said the deal was off and that it would file for bankruptcy.

The award-winning studio – including The Weinstein Co. Home Entertainment – founded by Harvey and Bob Weinstein, is embroiled in myriad allegations of improper sexual conduct, including rape, by Harvey Weinstein – charges Weinstein denies.

Contreras-Sweet, together with billionaire investor Ron Burkle, had offered $500 million for TWC – a deal that apparently fell through after New York Attorney General Eric Schneiderman filed a lawsuit against TWC on Feb. 11.

Schneiderman subsequently voiced his disappointment that TWC was looking at filing for bankruptcy.

In a statement, reported by Reuters, Contreras-Sweet said investors had reached an agreement to purchase TWC assets, launch a new company, majority led by women, save about 150 jobs, protect small businesses that are owed money and create a victims’ compensation fund, among other objectives.

“We are grateful to the New York State Attorney General’s office for their efforts in helping us reach an agreement and we are grateful to our investors who have believed in this process and in the compelling value of a female-led company. We also want to thank all the parties who returned to the negotiating table to help reach this development,” read the statement.

The Weinstein Co. board later issued a statement confirming the deal.

“We greatly appreciate the efforts of Attorney General Schneiderman and his staff, Maria Contreras-Sweet, Ron Burkle and his team at Yucaipa for bringing about this agreement,” read the statement.

Schneiderman, in a statement, reiterated his support for the deal.

“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 Weinstein Co. Eyeing Bankruptcy

Embattled independent studio The Weinstein Co. is set to file for bankruptcy protection after a planned $500 million sale to an investor group fell through.

The Feb. 25 announcement – disclosed by TWC’s board of directors – follows months of turmoil that saw co-founder Harvey Weinstein fired from the company last October after myriad complaints of sexual misconduct – behavior that helped spawn the nationwide #MeToo movement against sexual harassment.

With a content legacy that has generated 341 Academy Award nominations, 81 Oscars and 12 Emmy nominations for TV productions, TWC generated significant interest throughout Hollywood. The company includes TWC Home Entertainment, which launched in 2005.

Last November, Maria Contreras-Sweet, former head of the Small Business Administration under President Obama, together with billionaire investor Ron Burkle, placed a $275 million offer for TWC, which included assumption of $225 million in debt. Contreras-Sweet sought to have TWC led by female management, in addition to the establishment of a victims’ fund.

Then on Feb. 11, New York Attorney General Eric Schneiderman filed a lawsuit against New York-based TWC, Harvey Weinstein and Bob Weinstein, alleging violations of civil rights, human rights and business laws.

Schneiderman questioned components of the deal, including actual existence of a victims’ fund and alleged tone-deaf response to sexual harassment complaints from COO David Glasser, who was fired by the board on Feb. 16.

With the deal collapsed, TWC board issued a statement critical of the bid and bidders. Specifically, the board lamented failed fiscal guarantees that it said would have helped sustain the studio during the sale process.

“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,” said the board.

How events impact home entertainment remains to be seen. TWC licensed retail distribution to Genius Products, then sold them to Vivendi Entertainment in 2009 following the former’s bankruptcy. In 2010, TWC inked retail distribution with Sony Pictures Home Entertainment, which then moved to Anchor Bay Entertainment (and Starz Distribution) in 2011.

Lionsgate assumed the rights following its $4.4 billion acquisition of Starz in 2016.