The Weinstein Company says it will file for bankruptcy following the collapse of negotiations between the company and an investor group about a sale of the company, The New York Times reports.
“The beleaguered film and television studio said in a statement late Sunday that it had failed to reach a deal with a group led by Maria Contreras-Sweet, who ran the Small Business Administration under President Barack Obama. The group had offered to pay roughly $275 million for the Weinstein Company, plus the assumption of $225 million in debt,” The Times reports.
The company’s statement says: “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.”
The Times report adds: “The Weinstein Company board, a three-member group that includes its co-founder Bob Weinstein, also released a sharply worded letter it sent earlier on Sunday to Ms. Contreras-Sweet and one of her primary backers, Ron Burkle, the billionaire investor. In the letter, the board members said they had worked ‘tirelessly’ in recent days to meet ‘virtually every demand you imposed,’ including waiving a breakup fee if a deal was not consummated.”
The letter indicates that Contreras-Sweet’s team did not deliver on a promise to provide interim funding to keep the 150-employee studio operating until a deal could be completed. “The letter also said that she had proposed new sale conditions that could add ‘many months (or longer)’ to the closing process,” The Times adds.