The Weinstein Company has revived a deal to sell its assets to investors who want to transform the scandal-plagued film studio into a female-led entertainment venture.
It is the latest twist in the company’s efforts to avoid bankruptcy following the downfall of Hollywood mogul Harvey Weinstein.
It marks a swift reversal of fortunes just days after the Weinstein Company announced it would file for bankruptcy protection.
Then it said negotiations had fallen apart with a group led by businesswoman Maria Contreras-Sweet and billionaire investor Ron Burkle.
My statement on the agreement to sell The Weinstein Company’s assets: pic.twitter.com/YF4XPtQGZ5
— Eric Schneiderman (@AGSchneiderman) March 2, 2018
But the two sides soon returned to talks, along with New York State Attorney General Eric Schneiderman, who filed a lawsuit against the company three weeks ago that threw a wrench in the deal.
A bankruptcy protection filing would have halted lawsuits filed by women who have accused Mr Weinstein of sexual harassment, assault and other misconduct.
The sale deal includes a commitment from the buyers to establish a compensation fund of up to 90 million dollars (£65 million) for his accusers. Mr Weinstein has denied all allegations of assault.
“The deal provides a clear path for compensation for victims and protects the jobs of our employees,” the Weinstein Company’s board of directors said.
“We consider this to be a positive outcome under what have been incredibly difficult circumstances.”
Ms Contreras-Sweet said the deal would save about 150 jobs and protect the small businesses that are owed money by the studio.
She said she would “launch a new company that represents the best practices in corporate governance and transparency”.
Mr Schneiderman said he was pleased the deal would “create a real, well-funded victims compensation fund, implement HR policies that will protect all employees and will not unjustly reward bad actors”.
He said his office would work with the two sides to ensure they honour their commitment and that his lawsuit and investigation into the Weinstein Company remain active.
The announcement came after the pair met co-founder, Bob Weinstein, at Mr Schneiderman’s office, according to several people familiar with the negotiations.
A source said the two sides agreed to a 40-day closing process. The deal is said to include financing for the Weinstein Company to meet payroll, rent and other financial obligations while the sale is being finalised.
The buyers would pay 220 million dollars (£160 million) for most of the Weinstein Company assets and assume about 225 million dollars (£163 million) of the studio’s debt.
The source also said the buyers intend to retain company’s approximately 150 employees, though personnel decisions will be made later.
Ms Contreras-Sweet’s proposal has emerged as the Weinstein’s Company’s best chance to remain mostly intact, although under new leadership and with a different name.
The businesswoman, who headed the small business administration during the Obama administration, has no previous entertainment experience.
But her proposal beat several other prominent bidders who were mostly interested in buying parts of the company out of bankruptcy.
She has proposed remaking the company into a women-led venture, with a female-majority board of directors.
But Mr Schneiderman objected to the deal out of concerns that there is insufficient documentation guaranteeing compensation for the victims.
He also said the deal would potentially keep in place top executives accused of enabling Mr Weinstein’s alleged abuse of the company’s female employees.
The lawsuit launched three weeks of fraught, behind-the scenes talks to revive the sale, with several unreleased films hanging in the balance, including the Thomas Edison tale The Current War, with Benedict Cumberbatch, and Mary Magdalene starring Rooney Mara.
Days after Mr Schneiderman’s lawsuit, the Weinstein Company fired its president and former chief operating officer, David Glasser.
Ms Contreras-Sweet’s group, in private talks with the attorney general, ironed out a deal to alleviate his concerns, including setting the compensation fund.