Weinstein Company will declare bankruptcy after sale collapses

LOS ANGELES: Weinstein Co, the studio co-founded by Harvey Weinstein, will file for bankruptcy protection following the USD 500 million deal to sell the company collapsed, the company's board of directors said.

The decision came after the board was unable to revive a deal to sell the struggling studio to an investor group led by Maria Contreras-Sweet, who ran the Small Business Administration under President Barack Obama from 2014 to 2017, reported Variety.

The board of the company released a letter, in which it made clear that it was in dire need of operating cash.

"Based on the events of the past week, however, 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.

Despite your previous statements, it is simply impossible to avoid the conclusion that you have no intention to sign an agreement – much less to close one – and no desire to save valuable assets and jobs," the letter stated.

The sale was close to being announced exactly two weeks ago, when New York Attorney General Eric Schneiderman stepped in and filed a suit accusing the company of enabling Weinstein's sexual abuses.

The lawsuit scrambled the deal, creating the possibility of an outside monitor or other intrusive provisions.