Weinstein Co. expected to file bankruptcy after talks fail

Maeve McDermott | USATODAY

Show Caption Hide Caption The 94 percent: How common is sexual misconduct in Hollywood? 94% of the 843 women surveyed by USA TODAY who work in the entertainment industry say they've experienced some form of sexual harassment or assault.

The Weinstein Company is filing for bankruptcy after failing to strike a deal to sell its assets, according to a letter from the Weinstein Co. board released Sunday.

The decision comes after the board was unable to close a $500 million deal a deal to sell the struggling studio to an investor group led by Maria Contreras-Sweet, who served as the Obama administration's Small Business Administration chief from 2014 to 2017.

"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 the only viable option to maximize the company's remaining value: an orderly bankruptcy process," the Weinstein Co. board said in the letter, obtained by Variety and the Los Angeles Times.

According to the letter, the deal fell through after the bid group failed to provide "interim funding to run our business and maintain our employees." The deal was also complicated by New York Attorney General Eric Schneiderman filing suit against the company earlier this month, seeking restitution and damage payments for Weinstein's victims, as well as a $100,000-per-violation fine paid to the state.



Harvey Weinstein co-founded the Weinstein Co. in 2005 before he was fired last October after being accused of sexual assault and harassment by dozens of women. The Weinstein Co. has been searching for a financial savior ever since. Weinstein has consistently denied any nonconsensual encounters.



Related:https://www.usatoday.com/story/life/people/2017/11/20/harvey-weinstein-scandal-new-weinstein-company-bidder-proposes-majority-female-board/880162001/

More: New York AG sues Harvey Weinstein's company, complicating sale

As part of the plan to buy the Weinstein Co.'s assets, the bid group — which also included investor Ronald Burkle and private equity firm Lantern Asset Management — had promised to raise at least $40 million for a fund to compensate Weinstein's accusers, according to The Los Angeles Times and CBS News.

Contreras-Sweet first submitted an offer to acquire the Weinstein Company in November, writing in a letter that "we have now reached a crossroads where it is imperative that a woman-led board acquire control of the company and create content that continues to inspire audiences around the world, especially our young girls and boys."

The Associated Press contributed to this report.