NY Attorney General’s Office ‘Disappointed’ by Collapse of Weinstein Co Sale, New Bankruptcy Plan

Weinstein Company board members said Sunday night they were dropping a sale process and instead pursuing bankruptcy

Last Updated: February 26, 2018 @ 1:38 PM

The office of New York Attorney General Eric Schneiderman said Monday it was “disappointed” that The Weinstein Company plans to drop a proposed sale and instead pursue bankruptcy.

“We are disappointed that despite a clear path forward on those issues — including the buyer’s commitment to dedicate up to $90 million to victim compensation and implement gold-plated HR policies — the parties were unable to resolve their financial differences,” Director of Communications and Senior Counsel Eric Soufer said in a statement Monday.

Soufer added, “We will continue to pursue justice for victims in the event of the company’s bankruptcy, and our investigation into the pattern of egregious abuse by Harvey Weinstein and his enablers is ongoing.”

Gloria Allred also said she was “disappointed” in the decision of the Weinstein Company board, saying in a statement to TheWrap, “Our firm represents many women who allege that they were victims of Harvey Weinstein while he was employed by the Weinstein Company. We were hoping for a solution that would create a fund to compensate Mr. Weinstein’s many victims. We had confidence that fund would have been created if the Company had been sold. We will be reviewing this matter with bankruptcy counsel to discuss our client’s options moving forward.”

On Sunday, The Weinstein Company’s three remaining board members said they were dropping a sale process and instead pursuing bankruptcy, blaming the decision on bad faith by prospective buyers Maria Contreras-Sweet and Ron Burkle.

“As has been publicly reported, The Weinstein Company has been engaged in an active sale process in the hopes of preserving assets and jobs,” the board said in a statement. “Today, those discussions concluded without a signed agreement, as reflected in the attached letter. While we recognize that this is an extremely unfortunate outcome for our employees, our creditors and any victims, the Board has no choice but to pursue its only viable option to maximize the Company’s remaining value: an orderly bankruptcy process.  Over the coming days, the Company will prepare its bankruptcy filing with the goal of achieving maximum value in court.”

The letter attached to the statement, addressed to bidders Contreras-Sweet and Burkle, accused the duo of failing to provide “interim funding” that it said had been promised last week. The board also seemed put out by what they said was an attempt to revive the role of COO David Glasser, whom the board recently fired “for cause.”

The once-powerful independent film company was expected to sell for around $500 million, including $250 million in cash and the assumption of a roughly equal amount of debt. The deal has teetered on the brink of collapse since Schneiderman filed a civil-rights lawsuit against the company earlier this month, seeking to block the sale. Last week, the bidders and Schneiderman met to figure out a path forward.

Read the full statement below.

“Over the past two weeks, we had very productive discussions with both parties about accomplishing the Attorney General’s goals of compensating victims, protecting employees, and rooting out those who enabled years of sexual abuse at the Weinstein Company. We are disappointed that despite a clear path forward on those issues–including the buyer’s commitment to dedicate up to $90 million to victim compensation and implement gold-plated HR policies–the parties were unable to resolve their financial differences. We will continue to pursue justice for victims in the event of the company’s bankruptcy, and our investigation into the pattern of egregious abuse by Harvey Weinstein and his enablers is ongoing.”

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