Weinstein Company’s future is still up in the air after New York AG suit
New York Attorney General Eric Schneiderman says he is not opposed to a sale of The Weinstein Company in theory — but he is opposed to the plan that’s on the table right now.
“We are prepared to talk to anyone,” Schneiderman said Monday, signaling a willingness to settle his newly-filed civil rights lawsuit against the company.
But he said there is no current meeting scheduled with the investor group led by Maria Contreras-Sweet, which is trying to take over the movie studio’s assets and wipe away the Weinstein stain.
The Weinstein Company’s deal with Contreras-Sweet was stymied, at least temporarily, by the filing of Schneiderman’s lawsuit on Sunday.
People involved with the talks warned that the civil action “effectively killed the deal.” But they were careful not to rule it out altogether. On Monday, one of the people said the deal is “hanging on by a thread.”
So the crippled studio’s fate is very much up in the air. There’s the looming prospect of a bankruptcy proceeding if all the parties involved can’t come to an agreement.
On one side, there’s the Weinstein Co. board of directors, some of whom have competing interests. Harvey Weinstein was forced out of the company last fall after The New York Times and The New Yorker exposed a pattern of predatory behavior. Some board members resigned. The remaining board members have been seeking a buyer for the company. Weinstein has denied any accusations of non-consensual sex.
The winning proposal came from Contreras-Sweet and other investors, including the financier Ron Burkle. Contreras-Sweet, a former head of the Small Business Administration, valued the Weinstein Co.’s assets at around $500 million. She pitched the creation of a women-led company with a new name and an inclusive mandate.
The seller and buyer were said to be close to an agreement last month.
That’s when Schneiderman entered the picture. His office has been investigating Weinstein Co. for four months. They say they found new evidence of harassment and discrimination within Weinstein Co.
There is a dispute about what happened in the days leading up to Sunday’s lawsuit filing. But it’s clear that Schneiderman’s office has been frustrated by a lack of cooperation from both the seller and buyer.
Contreras-Sweet’s representatives say the deal includes a restitution fund for Weinstein’s victims. They point out that attorney Gloria Allred, who has been representing some of Weinstein’s accusers, has been supportive of the proposed sale.
The deal’s “central goal was to launch a female controlled movie studio the first ever and create a real compensation fund for victims,” a source involved in the deal told CNNMoney on Sunday.
But Schneiderman said Monday that the talk of a victims fund and female control was “completely contradicted by the documents presented to us.”
These documents apparently listed the terms of the deal. David Glasser, the current COO of Weinstein Co., would be CEO of the new company, Schneiderman said.
At a press conference on Monday afternoon, Schneiderman indicated that Glasser’s continued involvement is unacceptable.
“The company’s management was complicit in this pattern of misconduct,” he said. “They knew what was happening,” and “not only did they fail to stop it, they enabled it and covered it up.”
Glasser could not immediately be reached for comment. A spokeswoman for Weinstein Co. declined to comment after the press conference.
Schneiderman emphasized that his office “will not stand in the way” if his concerns are addressed.
He repeated three main points: “Any deal must ensure first that victims will be adequately compensated;” that employees will be protected; and that executives who knew about Weinstein’s alleged acts “will not be rewarded.”
“As of yesterday, there was no deal that would have met these standards,” Schneiderman said.
When asked why he filed the suit when he did, Schneiderman said the buyers may not have known some of the facts his office had uncovered.
He said the investigation is ongoing and he is seeking cooperation — leaving the door wide open for a settlement.
Contreras-Sweet’s camp had no immediate response. It is unclear what the Weinstein Co. board will decide to do next.
For now, Schneiderman’s sound bites will dominate news coverage of the situation.
In front of a bank of cameras, he said his office has investigated many workplace harassment cases, and “we have never seen anything as despicable as what we’ve seen here.”