This article is more than 2 years old

This article is more than 2 years old

Harvey Weinstein’s film and TV production company has avoided bankruptcy at the 11th hour thanks to a $500m (£363m) takeover led by a former senior official in Barack Obama’s administration.

On Monday, the board of the Weinstein Company (TWC), which has been pushed to the point of closure following the wave of sexual harassment and assault claims against its co-founder Harvey Weinstein, said it would have to file for bankruptcy after a last minute offer proved “illusory”.

The consortium led by Maria Contreras-Sweet, the former head of the Small Business Administration in Obama’s government, and US billionaire Ron Burkle, has returned to the table and is hammering out the final details of a deal to save the business. The transaction includes an $80m compensation fund for victims of Harvey Weinstein, who resigned from the TWC board last year.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

One of the conditions of the deal going through is that Harvey Weinstein will not benefit financially from the sale.

“The deal provides a clear path for compensation for victims and protects the jobs of our employees,” the TWC board said in a statement. “We consider this to be a positive outcome under what have been incredibly difficult circumstances.”

Under the $500m deal, which will save 150 jobs, the Weinstein Company will be renamed and hire a new board of directors, the majority of which will be women. Contreras-Sweet said her involvement was inspired by the #MeToo movement that emerged in the wake of the Weinstein allegations.

“I have had a long-standing commitment to fostering women ownership in business,” she said. “This potential deal is an important step to that end. The cornerstone of our plan has been to launch a new company that represents the best practices in corporate governance and transparency.”

The consortium will take on $225m of debt on TWC’s books.

Q&A The Weinstein Company's box office hits Show Hide The Weinstein Company’s biggest box office hits 1. Django Unchained (2012) - $425m

2. The King’s Speech (2010) - $414m

3. Inglourious Basterds (2009) $321m

4. Paddington (2015) - $268m

5. Silver Linings Playbook (2012) - $236m

6. The Imitation Game (2014) - $233.5m

7. Scary Movie 4 (2006) - $178m

8. Lee Daniels’ The Butler (2013) - $176.6m

9 The Hateful Eight (2015) - $155.8m

10. Lion (2016) - $140m

11. The Artist (2011) - $133m

The TWC deal, which will take 40 days to complete, has also received the blessing of Eric Schneidermann, the New York attorney general, who filed a civil rights suit against TWC and its co-founders and criticised the previous structure of the deal.

“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,” he said.

“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.”

Weinstein has repeatedly denied all allegations of non-consensual sex.

The Weinsteins have put out 94 films since 2010 with the top five grossing more than $1.5bn internationally, according to Box Office Mojo.

The company has backed films including The King’s Speech, The Artist, Silver Linings Playbook and Quentin Tarantino’s Django Unchained.

Late last year the Weinstein Company sold off the US distribution rights to Paddington 2, the film with the biggest potential earnings due for launch at the time of the scandal, to give it the funds to keep operating while a buyer was sought. The film’s backers and makers also said the family movie should have no association with Weinstein.

The film, starring Hugh Grant and the Downton Abbey actor Hugh Bonneville, made $40m in the US and over $200m globally.

Two years ago Weinstein valued the company at up to $800m. A year before that the company was flying high as suitors including ITV looked at paying almost $1bn for its TV division, which makes shows including the immensely profitable reality show Project Runway, Netflix’s Marco Polo and the BBC’s War & Peace.

Burkle, a friend of the Weinstein brothers who has invested in some of their films, will take a minority stake in the new company taking over TWC through his investment vehicle Yucaipa.

Burkle backed the Weinsteins’ failed attempt in 2010 to buy back their original production company, Miramax, which produced hits including Pulp Fiction, No Country for Old Men and The English Patient. Miramax is now owned by the Qatar-based BeIN Media Group.

























































































