Weinstein company announced yesterday that it would file a bankruptcy suit after the collapse of negotiations for the sale its assets to a group of investors led by Maria Contras-Sweet, who was nominated by President Barack Obama to head of the Small Business Administration.
“We understand that this is an unfortunate outcome for our employees, creditors and victims, but the board of directors has no choice,” the company said in a statement.
The production company and film studios have announced that it will file a bankruptcy petition in the coming days.
The Weinstein board of directors, which includes three people, one of whom is the founder of the company, Bob Weinstein, brother of Harvey Weinstein, also published a letter sent to the Contras-Sweet and one of its main investors, billionaire Ron Barkal.
In the letter of the Board of Directors, he claims that he made adamant efforts to comply with all of the Group’s requirements, including waiving the separation fee, in the event that the transaction is not exercised.
However, according to the letter, the Contras-Sweet group of investors failed to meet its commitments to provide interim financing to Weinstein, in order to enable the company to continue operating until the deal is concluded.
Weinstein is fighting for its survival following the ostensible sexual harassment scandal perpetrated by company owners Harvey Weinstein.
More than 50 women, among them Holywood’s superstars, have accused the film producer of sexual harassment, abuse, assault and rape.
The company agreed to sell it to the group of investors led by Contras-Sweet for $275 million for the studios and $225 million in debt coverage.
The deal encountered difficulties after New York attorney general Eric Schneiderman announced on February 11th that an indictment had been filed against the studios and company management, alleging that the company violated state and municipal laws on gender discrimination, sexual harassment and sexual abuse. Schneiderman is seeking an unspecified sum to cover damages, plus penalties, for victims of alleged abuse.