The deal to buy assets of Harvey Weinstein’s former production company collapsed Tuesday as a former official in president Barack Obama’s administration said her investor group was abandoning the venture for now.
“All of us have worked in earnest on the transaction to purchase the assets of The Weinstein Company,” Maria Contreras-Sweet said.
“However, after signing and entering into the confirmatory diligence phase, we have received disappointing information about the viability of completing this transaction. As a result, we have decided to terminate this transaction.”
The studio’s “disappointed” board of directors responded by saying they would now pursue “an orderly bankruptcy process” while working “tirelessly” to see if there are any other viable options.
A source familiar with the deal told AFP on condition of anonymity that the buyers discovered for the first time Tuesday $64 million in undisclosed liabilities. The Contreras-Sweet group’s bid for the company had been reported at $500 million.
The breakdown was the latest dramatic twist in a long-running saga over the future of the New York-headquartered film studio, which has teetered on the brink of bankruptcy since Weinstein was hit by sexual assault allegations, torpedoing his career last October.
“The investors’ excuse that they learned new information about the company’s financial condition is just that — an excuse,” said The Weinstein Company board in a tersely-worded statement.
“The company has been transparent about its dire financial condition to the point of announcing its own LIKELY bankruptcy last week. We regret being correct that this buyer simply had no intention of following through on its promises.”
Contreras-Sweet’s bid to buy the production house hit a first snag last month when New York state attorney general Eric Schneiderman sued The Weinstein Company, fearing that imminent sale could leave victims of the mogul’s alleged sexual misconduct without adequate redress.
Schneiderman has stipulated that any deal provide adequate compensation for victims, protect employees and remove executives who had been complicit in Weinstein’s misconduct.