Weinstein Co. battles back

Photo: The Canadian Press

The Weinstein Co. revived a deal to sell its assets to a group of investors who want to transform the scandal-plagued film studio into a female-led entertainment venture, the latest twist in the company's tortured efforts to avoid bankruptcy following the downfall of Hollywood mogul Harvey Weinstein.

The company's announcement Thursday marks a swift and dramatic reversal of fortunes. It came just four days after the Weinstein Co. announced it would file for bankruptcy protection, saying negotiations had fallen apart with the group led by businesswoman Maria Contreras-Sweet and billionaire investor Ron Burkle. But the two sides soon returned to talks, along with New York State Attorney General Eric Schneiderman, who filed a lawsuit against the company three weeks ago that threw a wrench in the deal.

A bankruptcy protection filing would have halted lawsuits filed by women who have accused Harvey Weinstein of sexual harassment, assault and other misconduct. The sale deal includes a commitment from the buyers to establish a compensation fund of up to $90 million for Weinstein's accusers. Weinstein has denied all allegations of assault.

"The deal provides a clear path for compensation for victims and protects the jobs of our employees," the Weinstein Co.'s board of directors said in a statement. "We consider this to be a positive outcome under what have been incredibly difficult circumstances."

Contreras-Sweet said the deal would save about 150 jobs and protect the small businesses that are owed money by the studio. She said she would "launch a new company that represents the best practices in corporate governance and transparency."

Schneiderman said in a statement that he was pleased that the deal would "create a real, well-funded victims compensation fund, implement HR policies that will protect all employees and will not unjustly reward bad actors."

He said his office would work with the two sides to ensure they honour their commitment and that his lawsuit and investigation into the Weinstein Co. remain active.

The announcement came after Contreras-Sweet and Burkle met with the company's co-founder, Bob Weinstein, at Schneiderman's office, according to several people familiar with the negotiations.

A person familiar with the negotiations said the two sides agreed to a 40-day closing process. The person said the deal includes financing for the Weinstein Co. to meet payroll, rent and other financial obligations while the sale is being finalized.