Weinstein Co. deal collapses in yet another twist, pushing studio closer to bankruptcy

The deal for an investor group to acquire Harvey Weinstein’s former movie and TV studio has collapsed in yet another twist in an ongoing saga that has seen agreements come and go amid the general chaos surrounding Weinstein Co.

A source close to Maria Contreras-Sweet, a former Obama administration official who is leading the investment group, said Tuesday that there was about $50 million more debt on the New York company’s books than previously thought.

“All of us have worked in earnest on the transaction to purchase the assets of the Weinstein Company. However, after signing and entering into the confirmatory diligence phase, we have received disappointing information about the viability of completing this transaction,” Contreras-Sweet said in a statement.

“As a result, we have decided to terminate this transaction.”

The latest development increases the likelihood that Weinstein Co. will file for bankruptcy protection and casts additional uncertainty over the fate of the company’s estimated 130 employees in New York and Los Angeles.

Harvey Weinstein was forced out of the company he co-founded after dozens of women accused him of sexual misconduct.

Contreras-Sweet’s group, backed by billionaire Ron Burkle, had announced Thursday that it had reached an agreement in principle to buy Weinstein Co., subject to a 40-day closing period.

The terms of the agreement weren’t disclosed, but The Times learned that the bid was worth $500 million, including the assumption of $225 million in debt.

A source familiar with the deal said the buyers recently discovered undisclosed liabilities, including $27 million in residuals and profit participation and $20 million in accounts payable. There was also a $17-million debt outstanding in connection with a commercial arbitration award.

Contreras-Sweet said Tuesday that the group will consider acquiring Weinstein Co. assets that may become available in the event of bankruptcy proceedings.

The abandoned deal would have put a female face on a company that has been besieged by the sexual harassment and assault accusations against Harvey Weinstein. The bidders had vowed to install a mainly female board of directors and rebrand a studio badly tarnished by the allegations against its co-founder.

Weinstein has denied all allegations of nonconsensual sex.

“I remain committed to working to advance women’s business ownership in all sectors and to inspire girls to envision their futures as leaders of important companies,” Contreras-Sweet said in her statement.

HAPPY BIRTHDAY

Actress Laura Prepon is 38 … Actor/director Jay Duplass (“The Mindy Project”) is 45 … Actress Rachel Weisz is 48 …  Actor Peter Sarsgaard is 47 … Comedian Wanda Sykes is 54 .. Actor Bryan Cranston (“Breaking Bad”) is 62 … Guitarist Ernie Isley of The Isley Brothers is 66.

Wire Report
Share
Published by
Wire Report

Recent Posts

Preparing for the ‘Big One’

Twenty-nine years ago this week, the San Andreas Fault sent a shock that reverberated throughout the Bay Area. This shock…

6 mins ago

Lyft and SF partner to offer free bikeshare for SFSU students

About 550 San Francisco State University students — including some of its poorest — will soon be able to rent…

7 mins ago

Sacred Heart Cathedral beats St. Ignatius for outright WCAL volleyball championship

SACRED HEART CATHEDRAL -- A year ago, Sacred Heart Cathedral senior outside hitter Lauren Sera's mother passed away. She doesn't…

29 mins ago

Reports suggest radioactive contamination affects Hunters Point Shipyard in areas never tested by Navy

Two new reports released Thursday by researchers at the University of California at Santa Cruz show that radioactive contamination at…

7 hours ago

Tickets to go on sale Monday as Hamilton returns to SF

The hit play "Hamilton" is returning to San Francisco and tickets go on sale to the public on Monday morning,…

8 hours ago

Planning Commission approves new restrictions on Mission District bars, restaurants

The San Francisco Planning Commission on Thursday tightened restrictions on new bars and alcohol-serving restaurants vying to set up shop…

8 hours ago