Once again, the sale of Weinstein Group has fallen through.
Following Harvey Weinstein’s ouster from the studio after allegations of rampant and repeated sexual assault by the studio’s founder, Weinstein Group has been searching for a buyer to avoid falling into bankruptcy. And for the past few months, it seemed that one group was poised to purchase the studio.
The group is headed by Maria Contreras-Sweet, the former head of the Small Business Administration under President Obama, and includes billionaires Ron Burkle and Len Blavatnik. The deal has been in the works for some time now, with both parties circling closer to agreement despite various setbacks.
The deal was thought to be on the verge of completion, but yesterday, Contreras-Sweet’s group learned that Weinstein Co.’s liabilities were much higher than the original estimate of $225 million, causing the group to balk at the prospect of acquisition.
According to Contreras-Sweet’s group, there are an additional $64 million in liabilities ($27 million in residuals, $20 million in accounts payable, and a $17 million arbitration award) that were not previously accounted for.
The Weinstein Company board released a statement yesterday, saying:
We are disappointed by the announcement today that the investor group led by Maria Contreras-Sweet and Ron Burkle has (again) walked away from its bid to buy the assets of the Weinstein Company.
The investors’ excuse that they learned new information about the company’s financial condition is just that – an excuse.
Weinstein Company is on thin ice, and Contreras-Sweet backing away from the deal leaves the studio with no other prospective buyers and bankruptcy all but certain.
In her own statement yesterday, Contreras-Sweet said she would consider acquiring Weinstein Company’s assets should they become available as part of a bankruptcy filing; the prospect of an outright purchase, however, grows dimmer by the day.