In the wake of the tsunami of sexual allegations against Harvey Weinstein, his former company is filing for bankruptcy.
The Weinstein Company, a film and television studio, had been in talks with a group led by Maria Contreras-Sweet, who was in charge of the Small Business Administration under President Obama, and backed by billionaire Ron Burkle. The deal was said to be worth $500 million. The New York Times reported,
“Roughly $275 million for the Weinstein Company, plus the assumption of $225 million in debt.”
But according to a letter from the Weinstein Company to Contreras-Sweet and Burkle, the talks broke down. The letter said,
“[W]e 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. Despite your previous statements, it is simply impossible to avoid the conclusion that you have no intention to sign an agreement — much less to close one — and no desire to save valuable assets and jobs.
While we recognize that this is an extremely unfortunate outcome for our employees, our creditors and any victims, the board has no choice. Over the coming days, the company will prepare its bankruptcy filing with the goal of achieving maximum value in court.“
And two weeks ago, New York Attorney General Eric Schneiderman filed a civil rights lawsuit against the Weinstein Company, stating that that the studio
“repeatedly broke New York law by failing to protect its employees from pervasive sexual harassment, intimidation, and discrimination.
Any sale of The Weinstein Company must ensure that victims will be compensated, employees will be protected going forward, and that neither perpetrators nor enablers will be unjustly enriched.“
The suit appears to have played a role in blowing up the deal, but if there is no sale of the company, it’s not clear how victims would be compensated.
NPR’s Elizabeth Blair told Morning Edition that Gloria Allred, the attorney representing many of Harvey Weinstein’s alleged victims,
“was angry with the timing of the New York Attorney General’s lawsuit precisely because she feared it would kill the deal and lead to bankruptcy … which would hurt the victims’ chances for compensation.”
The fall of the once mighty Weinstein Company has been precipitous. In the four-and-a-half months since The New York Times reported allegations of sexual misconduct by Weinstein over decades, ranging from harassment to rape. Soon further allegations were reported and Weinstein was fired from the company three days after the Times story appeared.
The Daily News reports that Weinstein’s wife, Marchesa designer Georgina Chapman plans to divorce him in a settlement worth $15 million to $20 million. Their prenuptial agreement said that Weinstein must pay $300,000 in spousal support for each year of the marriage if it lasted less than a decade but if the marriage went past 10 years, that figure reportedly would have jumped to $400,000. The split came just ahead of the their 10-year anniversary. Chapman has yet to file papers making the divorce official.
Lisa Bloom, then Weinstein’s lawyer, said in October, Weinstein has apologized for some of his behavior, but,
“Denies many of the accusations as patently false.“
(Photos, YouTube; via NPR)