The Weinstein Company says it will file for bankruptcy after sale talks fell through. The company emailed a statement late Sunday night claiming the interested buyer — an investment group led by former Obama administration official Maria Contreras-Sweet — failed to meet adequate terms of the sale.
“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,” the letter said. “We will now pursue the Board’s only viable option to maximize the Company’s remaining value: an orderly bankruptcy process.”
The death blow for the sale seems to have come from New York Attorney General Eric Schneiderman’s recent lawsuit, which alleged gender discrimination, sexual harassment and more.
It seems likely The Weinstein Company will file Chapter 11 bankruptcy.
Unlike Chapter 7 bankruptcy, in which a company generally pays off its debt by selling its assets, Chapter 11 protects the company from its creditors via the court, which oversees restructuring and negotiations to pay off the debt.
A private sale would have put tens of millions of dollars into a victims’ fund to be paid out in settlement.
Under a Chapter 11 bankruptcy, that is unlikely to happen. Instead, the women accusing Weinstein will essentially become creditors, and move to the back of the long line of creditors waiting for restitution from The Weinstein Company.
|How women pay an economic price after sexual harassment|
|Should we think about sexual harassment as a spectrum?|
|As women speak out on sexual harassment, investors take note|
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.