Last week, it was looking like The Weinstein Company was finally going to be sold.
A deal was close to being reached for an investor group led by former Obama administration senior official Maria Contreras-Sweet and billionaire Ron Burkle to buy the film and TV production company for $500 million.
The sale would have included an $80m compensation fund for victims of Harvey Weinstein and the company was going to be renamed with a new female-led board of directors.
However, the deal has fallen through after the buyers reportedly discovered tens of millions of dollars more in liabilities on the books than expected.
The investor group had entered a 40-day process to go over TWC’s books in intricate detail before completing the deal. While originally they were expecting to assume $225m in debt on the company’s books, the group reportedly uncovered an additional $50m-60m in debt and other liabilities.
Contreras-Sweet said in a statement: “All of us have worked in earnest on the transaction to purchase the assets of The Weinstein Company. 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.”
The failure of the deal likely means that The Weinstein Comapny will be forced to file for bankruptcy in the coming days.
The board of TWC have blamed Contreras-Sweet and Burkle for the collapse of the agreement.
“The investors’ excuse that they learned new information about the Company’s financial condition is just that — an excuse,” their statement read. “The Company has been transparent about its dire financial condition to the point of announcing its own LIKELY bankruptcy last week. We regret being correct that this buyer simply had no intention of following through on its promises. Nevertheless, this Board will not quit.
“We will continue to work tirelessly — as we have for months — to determine if there are any viable options outside of bankruptcy. In the meantime, we continue to pursue an orderly bankruptcy process to maximize the Company’s value.”