The fire sale of the Weinstein Co. hit a last-minute snag Sunday, when Eric Schneiderman, New York’s attorney general, filed a lawsuit against the studio and its fraternal founders alleging that they repeatedly violated state and city laws barring gender discrimination, sexual harassment, sexual abuse and coercion.
The lawsuit, filed electronically in state Supreme Court in Manhattan, appeared timed to at least delay a sale, which had been expected to be finalized Sunday.
If financiers get spooked, Schneiderman’s move could ultimately kill the proposed deal, putting the Weinstein Co. on an almost certain path to bankruptcy.
“Any sale of The Weinstein Company must ensure that victims will be compensated, employees will be protected going forward, and that neither perpetrators nor enablers will be unjustly enriched,” Schneiderman said in a news release.
The Weinstein Co. has been trying to avoid bankruptcy since October, when reports by The New York Times and The New Yorker revealed decades of sexual harassment allegations against one of its founders, Harvey Weinstein. The company was near a deal to sell itself to an investor group for roughly $275 million, plus the assumption of $225 million in debt, according to two people briefed on the deal who spoke on condition of anonymity because the negotiations are private.
The investor group, led by Maria Contreras-Sweet, who is best known for running the Small Business Administration under President Barack Obama, has publicly said it would create a multimillion-dollar settlement fund (in addition to insurance that is already in place) for women who have accused Weinstein of abuse.
But the final-stage talks came to a halt Sunday afternoon, according to the two people briefed on the process, as the investor group received word that Schneiderman was about to file a lawsuit based on an ongoing four-month investigation into the company’s internal dealings.
The lawsuit says that the company’s management and board of directors “were repeatedly presented with credible evidence of HW’s sexual harassment” of company employees and interns “and his use of corporate employees and resources to facilitate sexual activity with third parties.”
Benjamin Brafman, a lawyer for Weinstein, said in a statement, “While Mr. Weinstein’s behavior was not without fault, there certainly was no criminality.”
Source: Pulse.ng
