New York (AFP) – The deal to buy assets from Harvey Weinstein’s former production company hit another roadblock 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.”
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.
It 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.
New York state attorney general Eric Schneiderman threw the first spanner into the works last month by suing The Weinstein Company, fearing that its imminent sale could leave victims of Weinstein’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.
“We’ll be disappointed if the parties cannot work out their differences and close the deal,” the attorney general’s office said.
Contreras-Sweet announced only last week that she had reached an agreement to purchase the assets, itself just days after the production house declared it would file for bankruptcy, accusing her investor group of coming up short on a deal.
The Weinstein Company board of directors had confirmed that agreement. “We consider this to be a positive outcome under what have been incredibly difficult circumstances,” it said at the time.
– ‘Bankruptcy proceedings’ –
But the latest announcement from Contreras-Sweet, a Mexican immigrant who headed the Small Business Administration under Barack Obama, reopens the prospect that The Weinstein Company will be forced to file for bankruptcy.
Contreras-Sweet, who was inspired by the #MeToo sexual harassment watershed in her bid to turn the company around and have it run by women, left open the possibility that she would still seek to do that from the ashes of the fallen mogul’s former studio.
“I believe that our vision to create a women-led film studio is still the correct course of action,” she said.
“To that end, we will consider acquiring assets that may become available in the event of bankruptcy proceedings, as well as other opportunities that may become available in the entertainment industry.”
Contreras-Sweet has previously said her intention was to “build a movie studio led by a board of directors made up of a majority of independent women, save about 150 jobs, protect the small businesses who are owed money and create a victims’ compensation fund.”
The fate of several finished movies, which have languished on the shelf since the scandal blew up, with no release dates announced, remains more unclear than ever.
They include historical drama “The Current War,” starring Benedict Cumberbatch as Thomas Edison, “Mary Magdalene,” a religious drama starring Rooney Mara, and “The War With Grandpa,” a comedy starring Robert De Niro.
Weinstein was sacked as company chairman in October after bombshell exposes accused him of years of sexual harassment, assault and even rape.
More than 100 women have since accused him of impropriety going back 40 years, ending his career and triggering a US reckoning over harassment and abuse that has toppled a litany of powerful men in various sectors.
Weinstein, a twice-married father of five, is being investigated by British and US police, but has not been charged with any crime. He denies having non-consensual sex and is reportedly in treatment for sex addiction.
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