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.