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Weinstein company avoids bankruptcy in 11th-hour $500m deal
March 22 2018, 05:45 | Alonzo Simpson
Harvey Weinstein Getty Images
Maria Contreras-Sweet announced that a deal was reached for the investor group she and billionaire Ron Burkle (a friend of the Weinstein brothers who invested in some of their films) led to buy the film and TV production company after a sit-down between all sides along with New York State Attorney General Eric Schneiderman.
The studio almost went bankrupt after more than 70 women accused co-founder Harvey Weinstein, then one of Hollywood's most influential men, of sexual misconduct including rape.
The Weinstein Co. board of directors released a statement announcing the agreement, thanking the investment group, and saying, "We consider this to be a positive outcome under what have been incredibly hard circumstances".
Contreras-Sweet said in a statement her aim is to build a studio whose board of directors has a majority of independent women and to create a victims' compensation fund.
TWC has never been able to recover from the multiple allegations of sexual harassment and assault lodged against Harvey Weinstein since last October, despite the fact that he was quickly fired from the company he co-founded.
Rocky negotiations had gone on for weeks between the investment group and the Weinstein Co., which has been in turmoil over accusations against Harvey Weinstein of sexual misconduct, including rape, by more than 50 women.
On Sunday, the company complained that Contreras-Sweet's group had neither kept its side of the bargain on Schneiderman's principles nor paid interim funding required to run the business and maintain employees before the buyout was finalized. The person also said the buyers intend to retain company's approximately 150 employees, though personnel decisions will be made later in the process.
The AG could now settle parts of the suit against the company and Bob Weinstein, although Schneiderman was careful to note in Thursday's statement that the suit remains active and that an investigation is ongoing.
A meeting last month between Contreras-Sweet and Schneiderman's office saw an agreement on expanding the size of a victim's compensation fund.
Contreras-Sweet will keep the current employees of the Weinstein Co as well as expand operations in L.A and London.
In a last minute deal, an investor group spearheaded by Ron Burkle has reached a $500 million deal with the Weinstein Co.to save the troubled company from bankruptcy.
The unexpected development comes only a few days after TWC said it had no choice but to file for bankruptcy after talks to sell its assets to Contreras-Sweet's investor group collapsed.
The board of directors of The Weinstein Company said late Sunday the NY film and TV studio planned to file for bankruptcy after talks to sell it collapsed, several media outlets reported. She said she would "launch a new company that represents the best practices in corporate governance and transparency".
NY state attorney general Eric Schneiderman stipulated last month that any deal should provide adequate compensation for victims, protect employees and remove executives who had been complicit in Weinstein's misconduct.
"Women will be significant investors in the new company and control its voting stock".