Colony Capital has been granted a three-week window to negotiate a deal for some or all of the Weinstein Company’s assets, as the company seeks to avoid a bankruptcy filing.
Sources tell Variety that the Weinstein Co.’s financial situation, and particularly its debt load, are more dire than was previously known. Nevertheless, Colony Capital, under the leadership of Tom Barrack, is still working toward some sort of purchase. Insiders say that Colony has reached out to other potential partners to help close the deal.
There has also been a shift in the human resources department, which has come under harsh criticism for failing to stand up to Weinstein’s abuses. Frank Gil, the head of the department, has been let go. He’s been replaced by David Anderson, an industry veteran who has worked with companies who are trying to dig out from troubling financial situations.
The Weinstein Co. was not in great financial shape before it was hobbled by the worst sex harassment scandal in Hollywood history. The company narrowly avoided going bankrupt in 2010, when it traded away 200 films in its library to Goldman Sachs and Assured Guaranty in a deal to wipe away $450 million in debt.
The company’s remaining assets are now in perilous condition. Weinstein is gone, having been fired after allegations surfaced that he had harassed or assaulted dozens of women over three decades. The top executives are either looking for the exits or facing difficult accusations of their own (co-founder Bob Weinstein has also been accused of harassing an employee, while chief operating officer David Glasser has a checkered legal history). The Weinstein brand is damaged beyond repair, to the point where the company is now exploring a name change. Several of the company’s projects in development have been canceled, while those that remain are not viewed as surefire commercial successes. Meanwhile, the company faces the potential of massive liabilities associated with future sex harassment claims.
The situation is beginning to resemble the collapse of Relativity Media, which declared bankruptcy in 2015 and went through a series of aborted rescue plans and auctions. Today, that company is essentially defunct. On Thursday, the Financial Times reported that Harvey Weinstein is working with billionaire Len Blavatnik and investor Ron Burkle on a purchase plan. Insiders say that they will have to wait at least until Colony’s three-week window expires to buy the company unless they team with Barrack. Burkle was an investor in Relativity.
Internally, work has ground to a halt, with staffers kept in limbo while they wait to see if they will have a new owner. Many are also processing their own complicated feelings about Harvey Weinstein’s alleged abuse of women, while trying to land new jobs. Those staffers still under contract believe that they can find new work and break their employment agreements because the situation is so chaotic.
The Weinstein Co. declined to comment.