The embattled Weinstein Company is expected to pursue a new round of sale discussions with prospective buyers next week now that the company’s three-week window of exclusive negotiations with Colony Capital is set to expire on Wednesday.
Colony is understood to have passed on making a deal for all or part of the Weinstein Co. A structured bankruptcy filing looms if banker Moelis & Company cannot find a taker for the company’s film and TV assets.
Viacom, Lionsgate, MGM, and the parent company of veteran indie player Killer Films are among those expected to look at some of the distressed company’s assets. The intensity of interest among the suitors varies, sources said.
Weinstein Co.’s fortunes have plummeted since early last month, when the New York Times and New Yorker published damning exposes detailed allegations of sexual assault and harassment against former co-chairman Harvey Weinstein dating back decades. Weinstein is now facing criminal investigations in New York, Los Angeles, and London. He is now in a legal battle with Weinstein Co., which fired him shortly after the stories were published.
The growing scandal has led to an exodus of business partners and creative talent from Weinstein Co. The company has had to table planned film releases, delay TV development projects at Apple and Amazon, and yank its title card off of existing shows such as Lifetime’s long-running “Project Runway.”
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The indie studio behind such recent Oscar winners as “The Artist” and “The King’s Speech” is also saddled with hundreds of millions in debt. Several prospective buyers have indicated they would not make a play for any assets until it goes into bankruptcy proceedings. A reorganization would allow the company to improve its financial liabilities and it would indemnify a potential owner legal action that might arise in connection with Weinstein’s tenure at the company.
In another sign that a bankruptcy restructuring is in the works, The Wrap reported Tuesday that the studio has hired FTI Consulting, a firm with extensive experience in corporate reorganizations. FTI previously worked with Relativity Media when the film and television studio filed for bankruptcy protection.
Last month, Thomas Barrack’s Colony Capital had come forward with an emergency cash infusion in return for an exclusive window to negotiate an acquisition. At present, sources said Weinstein Co. is looking to Fortress Investment Group to provide a short-term financial influx to stave off bankruptcy.
Weinstein Company leaders were floating valuations in the $300 million range, at various points, but companies that have kicked the tires say those figures are wildly inflated. In addition to “Project Runway,” Weinstein Co. has a film library, although the rights are encumbered for some time, and a host of development projects, as well as a distribution and marketing infrastructure.
Killer Content, the parent of Killer Films, is a new entrant in the mix of prospective Weinstein Co. buyers. The indie film banner has access to capital through its Killer Impact division that has a track record of partnering with socially conscious investors on various initiatives. Notably, the company is also headed by women.
(Pictured: “Project Runway”)