Weinstein Co. Board Says It Will File For Bankruptcy After Sale Collapses
STEVE INSKEEP, HOST:
The Weinstein Company is set to file for court protection from creditors. The company has been dragged down by the sexual misconduct scandal of its co-founder Harvey Weinstein, and then talks to sell the company collapsed on Sunday night. Companies such as Netflix have pulled projects away from this film and TV company. So let's talk this through with NPR's Elizabeth Blair.
ELIZABETH BLAIR, BYLINE: Hi, Steve.
INSKEEP: Why did the sale go away?
BLAIR: The deal-breaker appears to have been the bid group's refusal to put up cash to keep the company afloat. The board of The Weinstein Company released a letter Sunday evening to investors Maria Contreras-Sweet and Ron Burkle, who led the bid group, breaking off negotiations. The Weinstein Company made clear that it was in dire need of operating cash. And the bidders did not provide for adequate interim financing. The letter, which is posted on Variety's website, says, based on the events of the past week, we 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.
INSKEEP: So obviously, this company has had a huge amount of damage in the press and elsewhere. But isn't it also under an investigation by the New York state attorney general?
BLAIR: That's right. Well, the - New York Attorney General Eric Schneiderman filed a civil rights lawsuit after a four-month investigation. This was about two weeks ago. That lawsuit plays a very big role here because the sale was very close to being announced. And then Attorney General Schneiderman stepped in and filed a civil rights suit accusing the company of enabling Harvey Weinstein's sexual abuses. And so the lawsuit scrambled the deal.
One of Schneiderman's biggest objections was the investors' plan to make David Glasser the new company CEO. Glasser was a top executive under Harvey Weinstein. The attorney general was adamant that no perpetrators or enablers to Weinstein's misconduct be part of the sale. And he believed Glasser was one of them. Now, The Weinstein Company board then fired Glasser. And Schneiderman met with both sides of the sale and appeared to approve the conditions of the sale. However, it appears that the added stress on the transaction exposed conflicts between the two sides. According to The Weinstein Company letter, the two sides continued to have conflicts over Glasser's role, even though they'd already fired him.
INSKEEP: Elizabeth, if this company is heading toward bankruptcy, is there going to be any money left over to compensate Harvey Weinstein's victims?
BLAIR: That's unclear at this point. It should be said, Maria Contreras-Sweet, the main bidder, was committed to a victims fund. But now that the sale is off and The Weinstein Company is filing bankruptcy, where would the money for that fund come from? Just as an aside note, 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.
INSKEEP: Oh, meaning that a lawyer for some of the victims...
INSKEEP: ...Was hoping that this company would be sold and would continue in some fashion.
INSKEEP: Elizabeth, thanks very much.
BLAIR: Thank you, Steve.
INSKEEP: That's NPR's Elizabeth Blair.
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