The Weinstein Company, the troubled film studio co-founded by disgraced executive Harvey Weinstein, is filing for bankruptcy after last-ditch negotiations to sell the company's assets fell through.
In a statement to the media late Sunday, the company's three-person board of directors announced the plans, saying efforts to revive a deal to sell the company to a group of investors had failed.
"While we recognize that this is an extremely unfortunate outcome for our employees, our creditors and any victims, the board has no choice but to pursue the only viable option to maximize the company's remaining value: an orderly bankruptcy process," the board said.
The decision followed the collapse of negotiations to sell the studio to a group of investors led by Maria Contreras-Sweet, who ran the Small Business Administration under President Barack Obama from 2014 to 2017. The bid, backed by billionaire Ronald Burkle and private equity firm Lantern Asset Management would have given the group control over the struggling studio's assets, in a deal worth about $500 million, according to the Los Angeles Times.
The LA Times reported that Contreras-Sweet had promised to raise $40 million to compensate Weinstein's victims, and her investor group would have renamed the company and selected a new majority-women board of directors.
But talks over the sale were abruptly halted earlier this month, after New York Attorney General Eric Schneiderman filed a civil rights lawsuit against the Weinstein Company and its founders, and questioned the existence of the victims fund promised by the bidding investors.
"We will continue to pursue justice for victims in the event of the company’s bankruptcy, and our investigation into the pattern of egregious abuse by Harvey Weinstein and his enablers is ongoing," Schneiderman said in a statement.
In a second letter to the New York Times Sunday night, the Weinstein Company's board of directors accused Contreras-Sweet of not providing promised interim funding for the studio to continue operation. Neither Contreras-Sweet nor the Weinstein Company responded to requests for comment from BuzzFeed News.
The decision to file for Chapter 11 bankruptcy comes four months after investigations by the New York Times and the New Yorker revealed decades of sexual harassment and assault allegations against Weinstein, formerly one of Hollywood's most powerful executives. Weinstein, who founded the Weinstein Company with his brother, Bob, in 2005, was fired from the company in the wake of the allegations. Bob Weinstein remains on the board.
The Weinstein Company was already in a precarious financial position before the allegations, struggling with a large amount of debt and a lack of hit films in recent years, according to the LA Times. The allegations against Weinstein sparked a reckoning over workplace sexual misconduct, commonly known as the #MeToo movement, further damaging the company through its repeated association with news reports about sexual misconduct. And as the studio's partners cut ties in the wake of the reports concerning its cofounder, the company's future looked increasingly bleak.