The Weinstein Co is, once again, free falling towards bankruptcy as the investor group led by businesswoman, Maria Contreras- Sweet, and billionaire, Ron Burkle, called off the deal to buy the controversial film studio.
The buyer group announced that they will no longer seek to purchase the film and TV studio’s assets, a decision which came less than a week after saying it would buy them by assuming $225 million of debts. The $500-million deal to acquire disgraced producer, Harvey Weinstein’s company would have injected $275 million to relaunch Weinstein Co. with a new name.
What killed the deal, in the end, was the discovery of $65 million of additional liabilities, according to a person familiar with the group.
“We have received disappointing information about the viability of completing this transaction,” Ms. Contreras- Sweet said in a statement. “As a result, we have decided to terminate this transaction.”
Weinstein Co.’s board responded to the statement by pointing to the company’s transparency and dire financial condition. More so, they called the notion that the investors had learned this new information “an excuse” for not going forward with the deal. The board added that they will explore other options while continuing to pursue a bankruptcy process.
This failed deal would have transformed the Weinstein Co into a female-led company, a welcome twist, considering that the studio has been bombarded by endless sexual harassment and assault accusations against Harvey Weinstein.
The movie producer was forced out of the company he co-founded with his brother, Bob Weinstein, after multiple women accused Harvey Weinstein of sexual misconduct starting in October last year. The disgraced mogul denied all allegations of non-consensual sex.
A source familiar with the situation said that the Burkle-Contreras group had been aware of most of the company’s liabilities, some of which amassed during the past several months of negotiations.
The failed deal would have wired $1.7 million to Weinstein Co. on Tuesday to help the studio meet obligations including payroll and rent.
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