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The Weinstein Company’s Upcoming Bankruptcy
Date: Feb 27
The Weinstein Company (TWC), which was started by brothers Bob and Harvey Weinstein, has proven the old adage that "all press is good press" is simply false. As most Americans who watch television even a little bit will recall, Harvey Weinstein was dismissed from his role at the company when dozens of women accused him of sexual harassment or misconduct. The New York Times initially broke the story
which triggered an increasingly vocal conversation regarding sexual harassment and led to the #MeToo Movement
. TWC has been in both an apparent public relations and financial tailspin ever since.
In attempt to salvage the company, the company's board attempted to sell the company's assets to an investment company headed by Maria Contreras-Sweet and backed by billionaire Ron Burkle. In a nutshell, the investors were going to purchase TWC's assets for about $275 million and assume its debts. The whole deal appears to have fallen apart when New York Attorney General's office filed a lawsuit
In a letter from the TWC Board of Representatives to Contreras-Sweet and Burkle, the board stated that "In a meeting with New York's Attorney General on February 21, you asked The Weinstein Company to work with you as 'partners' toward the common goal of saving the Company, preserving jobs and establishing a victims' fund...we waited patiently for you to deliver the terms you represented would save this Company from certain bankruptcy." The letter continued, "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. This Board will not let that happen...we will now pursue the Board's only viable option to maximize the Company's remaining value: an orderly bankruptcy process.
See the link below to read the letter in its entirety. The letter from the TWC Board of Representatives to Contreras-Sweet and Burkle was reported on and linked to an article
on Variety's website; however, it should be noted that I have not verified the authenticity of this letter
The letter does not state exactly what type of bankruptcy
the Board is planning on for TWC, but the only logical conclusion would be reorganizing under Chapter 11. Chapter 11 is a common form of bankruptcy for companies, including Payless Shoe Source
based in Topeka, KS which filed chapter 11 bankruptcy in April 2017. Chapter 11 protects a company immediately upon the filing of the bankruptcy while the company works to put together a reorganization plan, which it will have to present to its creditors
, who will then vote on whether to accept the plan.
At times, filing bankruptcy is simply the best business decision available. It gives a company the opportunity to attempt to stabilize and work out a meaningful solution to its current debt problems. If you find yourself between a financial rock-and-a-hard-spot, it is likely well worth your time to seek the guidance of an experienced bankruptcy lawyer
by Adam Mack