The company has domestic rights to the family film, and has talked to several studios, including Sony and MGM, about such a deal. Sony is believed to be in the lead position to land the rights, insiders say, but the studio is concerned about legal entanglements surrounding the picture.
At the same time, the Weinstein Co.’s board of directors and leadership had been negotiating with Vine Investment Advisors and Fortress Investment Group about a possible $20 million to $35 million bridge loan that would enable the company to meet its payroll obligations. Insiders, however, believe that such a loan is looking increasingly unlikely. It also carries risks. The studio would use part of its film and television library as collateral. The libraries are already heavily mortgaged and further leveraging them could create additional headaches if the company has to file for Chapter 11. There is a strong sense that the Weinstein Co. could file for bankruptcy protection as early as Monday or Tuesday. The company is known to have retained FTI Consulting, a financial advisory firm that’s well-versed in corporate restructuring.
The Weinstein C0. would like to close a deal for “Paddington 2” before it undertakes any filing. It believes that the film’s monster opening in the United Kingdom last weekend, where it picked up $10.8 million, will increase the price tag. Studiocanal, the film’s producer, has the right of first refusal on any deal.
Insiders say the Weinstein Co. is saddled with as much as $500 million in debt and obligations. The company’s fiscal crisis has been exacerbated by the extraordinary wave of sexual assault allegations leveled against co-founder and former co-chairman Harvey Weinstein. The accusations have spurred an exodus of Weinstein Co. creative and business partners, sending the company into free fall even though Weinstein was fired last month.
Cynthia Littleton and Elsa Keslassy contributed to this report.