Weinstein Co. to Declare Bankruptcy Following Failed $500-M Deal Talks
Following a failed attempt to close a $500-million deal to sell the company, the Weinstein Co. is now preparing to declare bankruptcy. On Sunday, the company announced the impending declaration and explained that the talks had fallen apart in part over the issue of interim funding.
The board of Weinstein Co. released a statement to investors Ron Burkle and Maria Contreras-Sweet on Sunday evening to break the deal. The decision was reportedly due to the bid group's refusal to put up cash that will keep the company operational. In its letter to Ron Burkle and Maria Contreras-Sweet, Weinstein Co. said that the bidders did not provide for enough interim funding despite them making it clear that they were in dire need of operating cash.
"Based on the events of the past week, however, we must conclude that your plan to buy this company was illusory and would only leave this Company hobbling toward its demise to the detriment of all constituents. despite your previous statements, 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," said the Weinstein Co. in their letter to the bid group.
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The company also acknowledged in the statement that the impending declaration would be an extremely unfortunate event for their employees, creditors and other stakeholders, but they had no choice. Over the coming days, Weinstein Co. will start filing for bankruptcy "with the goal of achieving maximum value in court."
Previously led by now-disgraced producer Harvey Weinstein, Weinstein Co. had reportedly been in talks with Ron Burkle and Maria Contreras-Sweet about the proposed $500-million deal. The bid group was previously in charge of the Small Business Administration during former U.S. President Barack Obama's time and is financially supported by billionaire Ron Burkle.
