×

Weinstein Co. Feeling Pressure to Find a Buyer (EXCLUSIVE)

The Weinstein Co. is reviving its attempts to sell itself or the bulk of its film and television assets, Variety has learned. But the clock is ticking. The company was on the verge of bankruptcy last week, but after selling domestic distribution rights to “Paddington 2” in a $28 million deal with Warner Bros. it has bought itself some time. With the money, it now has enough cash to meet its payroll obligations, but it doesn’t have as much of a financial cushion as it would seem. That’s because The Weinstein Co. only receives a percentage of the money. Canal Plus, the film’s producer, picks up $20 million, while the Weinstein Co. gets the remaining $8 million.

The indie studio has been hit hard by a sexual harassment scandal involving co-founder Harvey Weinstein. It has already borrowed hundreds of millions against its film and TV library and now is grappling with the fact that its brand has become radioactive after dozens of women accused Weinstein of assault or unwanted sexual advances.

Weinstein Co. board members Lance Maerov and Tarak Ben Ammar have been handling the negotiations with banks and lenders, as the company assesses whether or not to dissolve, reorganize, or try to sell itself in pieces. Even though the “Paddington 2” sale may have alleviated some liquidity issues, there’s legal pressure accelerating the process. On Nov. 10, AI International Holdings, part of investor Len Blavatnik’s empire, filed a lawsuit in New York Supreme Court, claiming that the Weinstein Co. had defaulted on a $45 million loan. It is demanding that the studio repay the loan immediately. A hearing is scheduled for Dec. 13.

In a move to restart a sales process that had stalled out, L.A. investment bank Moelis & Co. has been reaching out to companies and entities that had expressed interest in the Weinstein Co. in the past. It has begun sending financial materials to potential bidders. Moelis & Co. is trying to find a stalking horse bidder, so far without much success. Part of the issue is that the company is carrying a substantial debt load and potential bidders who have looked at buying parts of the library or upcoming films say its books are a mess.

The studio does have a library of film titles that includes Oscar winners such as “The King’s Speech,” “Django Unchained,” and “The Artist,” and has rights to the “Project Runway” television franchise. However, those assets are heavily leveraged, having been borrowed against several times. Many bidders still think the company will be forced to file for bankruptcy protection or will liquidate.

The Blavatnik suit could add to Weinstein’s miseries. Soon after the initial New York Times’ expose on Weinstein’s sexual misdeeds and crimes was published, on Oct. 5, Weinstein lost his job, his marriage and his professional standing. He still has his freedom and his wealth, but he could be stripped of those as well.

The Blavatnik litigation was aimed both at the Weinstein Co. and at Weinstein personally. According to the suit, Weinstein signed a personal guarantee for the $45 million loan.

Should the Weinstein Co. opt to go into bankruptcy, that would freeze the litigation against the company. But the litigation against Weinstein would continue.

“There’s nothing a bankruptcy of the company will do to impact the lender’s ability to pursue claims against the guarantor,” says Keith Owens, a bankruptcy lawyer at Venable LLP. If they choose to be aggressive about it, Blavatnik’s attorneys could go after Weinstein’s assets by, for example, putting a lien on his house.

“If the corporate debtor files for bankruptcy, they want to have a non-bankrupt entity to go after,” says Roger Friedman, a bankruptcy lawyer at Rutan & Tucker. “If they get a judgment on the guarantee, they can then execute their judgment against his personal assets.”

Weinstein’s representatives declined to comment. The Weinstein Company did not immediately comment. Blavatnik’s attorneys did not respond to a call seeking comment.

More Film

  • 'The Lion King' Ruling Box Office

    'The Lion King' Ruling Box Office With Dazzling Debut at $180 Million

    Disney’s “The Lion King” has jolted the North American box office back to life with an opening weekend in the $180 million range, estimates showed Saturday. “The Lion King” will record the second-best opening of 2019 — and could replace “Incredibles 2,” which launched last year with $182.7 million, as the ninth biggest North American [...]

  • 'Tomb Raider' Star Simon Yam in

    'Tomb Raider' Star Simon Yam in Hospital After Stabbing

    Hugely popular Hong Kong actor, Simon Yam was stabbed while on stage Saturday at a presentation in Zhongshan, Guangdong province in southern China. He is in hospital recovering. The incident happened at the opening of a branch of the Beijing Easyhome building materials company, where Yam was a guest. A man was seen rushing on [...]

  • Brazilian President Jair Bolosnaro attends the

    Bolsonaro Threatens Brazil’s Central Film Fund with Censorship or Closure

    In typical shoot-from-the-hip remarks, Brazil’s far-right president Jair Bolsonaro has declared that Ancine, Brazil’s powerful state-backed federal film agency, should accept “filters”or face closure. “If it can’t have a filter, we’ll close Ancine, or privatize it,” Bolsonaro added, attacking Ancine, which plows some $300 million a year into Brazil’s film and TV industries, for supporting [...]

  • TSOM-MASK

    Director Sara Gouveia on ‘Looking At Resilience Through Art’

    DURBAN–The Mapiko dance of Mozambique’s indigenous Makonde people was long used as a tool for social commentary. But during the colonial era it became an act of political resistance, prompting the Portuguese to stamp it out during Mozambique’s 10-year war for independence. Decades later, the art has been revived as a celebration of freedom. For [...]

  • Don Edkins

    Documentary Filmmaker Don Edkins on ‘Creating an African Voice’ 

    DURBAN–For the 10th Durban FilmMart (DFM), the industry program of the Durban Intl. Film Festival, a new strand was created to look at the unique challenges and opportunities facing documentary filmmakers in Africa. The two-day program, Durban Does Docs, offers a series of conversations, seminars and workshops with an intensive focus on the aesthetics, funding, distribution [...]

  • A Faithful Man

    Film Review: 'A Faithful Man'

    French actor Louis Garrel has been married twice, first to Iranian talent Golshifteh Farahani, and now to model-cum-actress Laetitia Casta. He has also directed two features, the first a free-wheeling love-triangle comedy called “Two Friends” in which Garrel plays the cad who comes between his best friend and the object of his obsession (played by [...]

More From Our Brands

Access exclusive content