Deal for Weinstein Co. Is Back On, Investor Group Says
March 2, 2018 by admin
Filed under Lingerie Events
The Weinstein Company has been struggling to remain afloat since October, when The New York Times and The New Yorker magazine disclosed decades of sexual harassment allegations against the company’s co-owner Harvey Weinstein. The deal also includes a victims’ fund worth up to $90 million.
Mr. Weinstein has denied ever engaging in “non-consensual sex.”
He and his brother, Bob Weinstein, who jointly own about 42 percent of the Weinstein Company, would receive no cash from the sale. Other equity holders would also be wiped out.
The Weinstein Company had said on Sunday that it would file for bankruptcy after the collapse of talks with Ms. Contreras-Sweet’s group, which includes the billionaire investor Ron Burkle. The Weinstein Company’s board said at the time that promised interim funding from the group had not materialized, leaving bankruptcy as the only option.
But on Thursday, Mr. Schneiderman got the sale back on track by holding a meeting in his offices with Mr. Burkle and Ms. Contreras-Sweet and members of the Weinstein Company’s board, including Bob Weinstein and Lance Maerov, an executive at the advertising giant WPP Group. Mr. Burkle, who has a long history with the Weinstein Company, stepping in to help Harvey Weinstein finance films like “Our Idiot Brother” in 2011, asked for the meeting.
Mr. Schneiderman sued the company and the Weinstein brothers on Feb. 11, alleging that they violated state and city laws barring gender discrimination, sexual harassment and coercion. A deal for the company had been expected to be formalized on Feb. 12, but the lawsuit brought sale talks to a halt.
Amy Spitalnick, the press secretary for Mr. Schneiderman, said on Feb. 11 that his office had recently reached out to representatives of Ms. Contreras-Sweet to emphasize the importance of adequately compensating victims, protecting employees and not rewarding those who enabled or perpetuated Mr. Weinstein’s misconduct.
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“We were surprised to learn they were not serious about discussing any of those issues or even sharing the most basic information about how they planned to address them,” Ms. Spitalnick said.
Ms. Contreras-Sweet was stunned by Mr. Schneiderman’s public call for assurance that any sale ensure that victims are compensated, according to one person briefed on the matter, because she had already built funds into her proposal.
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By the end of that week, Mr. Schneiderman had started to get what he wanted. The Weinstein Company, for instance, fired its president, David Glasser, on Feb. 16. Mr. Glasser had been expected to run the new studio; Mr. Schneiderman had pointed to him as being one of the managers who perpetuated Mr. Weinstein’s behavior.
Ms. Contreras-Sweet also met with Mr. Schneiderman and laid out her plans for a victims’ compensation fund. In the end, the settlement fund was increased; up to $90 million will be made available, including an estimated $30 million in insurance money.
Ms. Contreras-Sweet outlined her plans for the company in a letter to its board in November, when she first made her offer.
“I will be chairwoman of a majority-female board of directors,” she wrote in the letter. “Women will be significant investors in the new company and control its voting stock.”
After failing to find other buyers who would keep the studio intact — Lionsgate, Shamrock Capital Advisors, Killer Content and the Qatari company beIN Media Group were among those considering various pieces — the board entered into exclusive negotiations with Ms. Contreras-Sweet’s group in late January.
Ms. Contreras-Sweet has no experience in Hollywood, but she is known in Los Angeles business and political circles. Much of her business career was spent at a California 7Up bottler, where she became vice president of public affairs and a part owner, according to her website. She then ran the California Business, Transportation and Housing Agency, managing a $14 million budget. After that, she co-founded a private equity firm and in late 2006 founded ProAmerica Bank, which focused on Latino small business owners. The bank struggled and was sold in 2015.
“We are grateful to the New York State attorney general’s office for their efforts in helping us reach an agreement, and we are grateful to our investors who have believed in this process and in the compelling value of a female-led company,” her statement on Thursday said. “We also want to thank all the parties who returned to the negotiating table to help us reach this development.”
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