The Weinstein Co. is still considering “transactions of all types,” despite declaring Sunday that negotiations on a sale had collapsed.
The company announced that it would begin preparing documents for a bankruptcy filing, though any actual filing is thought to be at least two weeks away. Seeking to reassure concerned employees on Tuesday, chairman Bob Weinstein said in an internal memo that the company would continue to make payroll. He described the company’s status as “a very fluid situation.”
“I had a call this morning and I want to pass along that we are still considering transactions of all types,” he wrote. “With regards to employee payroll, it will continue to be paid.”
The Weinstein Co. board announced on Sunday that it had broken off talks with billionaire Ron Burkle and Maria Contreras-Sweet, the former head of the Small Business Administration. The buyers were prepared to rescue the beleaguered company, offering to pay $275 million and assume $225 million in debt.
Talks broke down over the Weinstein Co.’s insistence on receiving a $7 million cash infusion before the transaction closes, according to sources familiar with the talks. Burkle and Contreras-Sweet saw that as a risky proposition, but remain interested in doing a deal.
Several observers saw the board’s announcement that it will pursue bankruptcy as a negotiating ploy. Bob Weinstein’s suggestion that the company is considering multiple possible transactions could also be read as an attempt to gain leverage on the buyers. Other potential bidders are thought to have been interested in acquiring the company’s library without assuming legal liability or the burdens of operating the company.