The Weinstein Company is moving closer to bankruptcy.
The studio co-founded by Harvey Weinstein has been crippled by the sexual harassment and assault allegations that have been leveled against him.
Now it appears that a deal to sell the studio’s assets is falling apart.
The studio’s board of directors said in a letter Sunday night that the would-be buyers were unwilling to provide interim financing to keep it afloat while the deal was finalized.
A source involved with the talks confirmed that the investors seeking to buy the assets have received the letter.
The investors — led by Maria Contreras-Sweet, former head of the U.S. Small Business Administration — had no immediate response on Monday morning.
“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 company’s board wrote.
“We will now pursue the board’s only viable option to maximize the company’s remaining value: an orderly bankruptcy process,” it added.
A bankruptcy proceeding is what the board had been trying to avoid.
Weinstein was ousted from his role at The Weinstein Company last fall after numerous reports of sexual misconduct. He has been accused of sexual harassment or abuse by more than 60 women.
Weinstein has denied any accounts of non-consenusal sex.
In the wake of the reports, many of the studio’s business partners fled. New business opportunities dried up.
The studio sought a buyer — and in January it entered into exclusive talks with Contreras-Sweet’s investor group.
She promoted the idea of a new studio, led by women, with the Weinstein name wiped away.
In the meantime, the existing owners have been trying to keep the studio’s doors open and keep staffers on payroll through a variety of financial maneuverings.
The deal talks were complicated two weeks ago when New York Attorney General Eric Schneiderman filed a lawsuit against Weinstein and his former company.
Schneiderman said that a four-month investigation into sexual harassment found “vicious and exploitative mistreatment of company employees.” The suit cites what it calls “egregious” violations of state civil and human rights laws.
The state A.G. said he “will not stand in the way” of a sale if his concerns are addressed. He expressed three concerns: “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.”
In the wake of the suit, the Weinstein Co. board forced out David Glasser, the company’s COO, one of the executives who had been singled out by Schneiderman.
Last Wednesday there was a meeting involving Schneiderman’s office and the would-be buyers of the studio. Both sides said it was “productive,” indicating that a settlement was in the works.
But then came Sunday’s letter from the board about the company’s financial crunch.