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In a surprise turn of events that mixes New York politics and an epic showbiz scandal, a $500 million deal to acquire the Weinstein Co. is now on “life support” because of the lawsuit filed Sunday by the state attorney general against the company and its founders, Harvey and Bob Weinstein.
Sources close to the situation said the prospects for the acquisition going through were looking slim on Monday after New York Attorney General Eric Schneiderman held a news conference Monday afternoon to detail his objections to the sale. The investor group headed by Maria Contreras-Sweet was frustrated by the situation and what they characterized as the lack of opportunity to discuss a compromise before Schneiderman filed the suit on Sunday. The existence of the suit makes it nearly impossible for the deal to move forward or for the Weinstein Co. to avoid bankruptcy, unless a settlement can be reached.
Source - Contreras-Sweet - Thinking - Sale - Process
One source familiar with Contreras-Sweet’s thinking described the sale process as being on “98% dead and on life support” while the investors try to figure out their options. A rep for Contreras-Sweet declined to comment.
N.Y. Attorney General Suit Details Culture of 'Harassment and Intimidation' at Weinstein Co.
Group - Ron - Burkle - Yucaipa - Co
The group includes Ron Burkle’s Yucaipa Co. and Dallas-based private equity firm Lantern Capital as minority investors. Contreras-Sweet is said to have raised about 65% of the funding for the deal through her contacts in the venture capital arena and from prominent women in entertainment and philanthropy. Her goal was to revive the beleaguered studio with a new name and a largely female-led management team.
Contreras-Sweet and Weinstein Co. had been working toward announcing the deal on Feb. 11 or Feb. 12. But the state’s legal maneuver threw an 11th-hour wrench in that plan. The Weinstein Co. has been in freefall for months, ever since damning exposes...
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