In the wake of a massive expose that revealed decades of abuse perpetrated by Hollywood mogul Harvey Weinstein, the Weinstein company has decided to declare bankruptcy after a buyout from an investor group has fallen through. Weinstein was deposed from his own company in 2017 amidst the reports.
“While we recognize that this is an extremely unfortunate outcome for our employees, our creditors and any victims, the board has no choice,” the company’s statement said, according to The New York Times. “Over the coming days, the company will prepare its bankruptcy filing with the goal of achieving maximum value in court.”
More specifically, the Company will file for Chapter 11 bankruptcy — which would allow for the creation of a plan to pay off creditors, according to the Wall Street Journal.
A group led by Maria Contreras-Sweet, a former leader of the Small Business Association under President Obama, had agreed to roughly $275 million (plus $225 million of the company's debts). The deal has reportedly collapsed, with Weinstein Company boards saying in a letter that they had attempted to meet “virtually every demand [Contreras-Sweet] imposed."
“We have believed in this Company and in the goals set forth by the Attorney General,” the board’s letter stated, according to The Washington Post. “Based on the events of the past week, however, we must conclude that your plan to buy this company was illusory and would only leave this Company hobbling toward its demise to the detriment of all constituents.”
It was disagreements over interim funding that apparently caused the falling out — the Weinstein Company could not obtain additional finances to keep their business running while the deal went through.
Only two weeks before this, the Company had also faced a substantial lawsuit from New York attorney general Eric T. Schneiderman, which accused the group of widespread gender discrimination, sexual harassment, sexual abuse, and coercion. Following the announcement of the suit, the Company fired its president, David Glasser. (Glasser had not been directly named in the suit. He has threatened to sue the remaining board members, according to the Hollywood Reporter.)
Through unnamed sources, The Times was able to confirm that the potential purchase of the Weinstein Company would have included tens of millions of dollars paid out to victims.
Representatives for Contreras-Sweet’s team have not offered a comment on the situation.
Weinstein continues to deny “any allegations of nonconsensual sex.”
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