The Weinstein Co. has agreed to sell the majority of its assets to an investment group led by Maria Contreras-Sweet and Ron Burkle, striking an agreement after difficult negotiations among the board and the New York Attorney General Eric Schneiderman.
The group has taken about 95 percent of assets on the table, one individual familiar with the deal said, though it’s unclear what will remain in the hands of the current shareholders and board.
The announcement was sent wide on Thrursday as the investors sat hashing out a deal in the office of Schneiderman, who has been advocating for a sale while also suing TWC for civil rights violations from its ousted CEO and co-founder Harvey Weinstein, according to a second person familiar with the talks.
The Contreras-Sweet Group asserts a new company will be formed with all the perks it had in mind for TWC — a majority-female board, assumption of $225 million in debt and a fund for victims of Harvey Weinstein’s accused sexual misconduct.
The news comes as a dizzying reversal of a shocking bankruptcy scenario the current TWC board said it had no choice but to pursue last week — effectively rejecting a previous $500 million outright sale to the exclusive bidders.
This does not mean TWC and its gatekeepers — board members Bob Weinstein, ad executive Lance Maerov and investor Tarak Ben Ammar — are out of the woods. While the investors walk with the majority of the company, the insider insisted The Weinstein Company would still exist in some form.
“We have taken an important step and have reached an agreement to purchase assets from The Weinstein Company in order to launch a new company, with a new board and a new vision that embodies the principles that we have stood by since we began this process last fall,” the new investors said in a statement.
Operational funding was the primary reason the TWC called off the sale — because they had none, and the investor group would not provide an interim loan to keep the lights on. The operational cash issue has been “resolved,” the individual told TheWrap, as the investors now plan to absorb the assets.
Representatives for the current TWC board and Schneiderman did not immediately return TheWrap’s request for comment.
Read the full announcement:
Our team is pleased to announce that we have taken an important step and have reached an agreement to purchase assets from The Weinstein Company in order to launch a new company, with a new board and a new vision that embodies the principles that we have stood by since we began this process last fall. Those principles have never wavered and have always been to build a movie studio led by a board of directors made up of a majority of independent women, save about 150 jobs, protect the small businesses who are owed money and create a victims’ compensation fund that would supplement existing insurance coverage for those who have been harmed. The cornerstone of our plan has been to launch a new company that represents the best practices in corporate governance and transparency.
This next step represents the best possible pathway to support victims and protect employees.
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 us reach this development.
The Weinstein Company also released a statement:
We are pleased to announce that we have entered into an agreement to sell the assets of The Weinstein Company to an investor group led by Maria Contreras-Sweet and Ron Burkle. The deal provides a clear path for compensation for victims and protects the jobs of our employees. 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. We consider this to be a positive outcome under what have been incredibly difficult circumstances.
New York Attorney General Eric T. Schneiderman released a statement later Thursday:
As I made clear from the start, 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.
As part of these negotiations, we are pleased to have received express commitments from the parties that the new company will create a real, well-funded victims compensation fund, implement HR policies that will protect all employees, and will not unjustly reward bad actors. We will work with the parties in the weeks ahead to ensure that the parties honor and memorialize these commitments prior to closing. Our lawsuit remains active and investigation remains ongoing at this time.