NEW YORK (AP) — A female-led investor group has canceled a deal to buy the Weinstein Co., citing “disappointing information” about the deal’s viability.
The deal to sell the Weinstein Co.’s assets to a group of investors led by businesswoman Maria Contreras-Sweet and billionaire investor Ron Burkle has been called off.
Contreras-Sweet made the announcement in a statement Tuesday. She did not offer more details about why the deal fell apart but said the group may still be interested in acquiring assets of the movie and TV studio out of bankruptcy proceedings.
The Weinstein Co. announced March 1 that a deal with Contreras-Sweet’s group had been reached, just four days after announcing it would file for bankruptcy protection. This all came after New York State Attorney General Eric Schneiderman filed a lawsuit against the company three weeks ago that threw a wrench in the deal.
The sale had included a commitment from the buyers to establish a compensation fund of up to $90 million for Harvey Weinstein’s accusers.
Weinstein has denied all allegations of sexual assault.
Last week, 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.”
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He said his office would work with the two sides to ensure they honor 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.
The buyers would pay $220 million for most of the Weinstein Co. assets and assume about $225 million of the studio’s debt. The new company would also dedicate $90 million to compensate Harvey Weinstein’s accusers, including $60 million put up by the buyers and $30 million from insurance proceeds. The person also said the buyers intend to retain company’s approximately 150 employees, though personnel decisions will be made later in the process.
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