Will the sexual assault scandal simmering at The Weinstein Company lead to bankruptcy? Not according to Bob Weinstein, but other signs indicate it might happen.
According to Variety, the company’s leadership is torn on whether to reorganize in the face of potential bankruptcy. Some members wish to sell the company. Others are concerned that the explosive allegations against Harvey Weinstein could lead to massive liabilities when all potential sex assault and harassment lawsuits are said and done. Still, others worry that the name of the company has been irreversibly tarnished, which will affect its ability to move forward with new projects.
And according to TMZ, company leaders are concerned that they might not be able to get rid of Harvey Weinstein. Despite having already fired him, his contract stipulates that he is entitled to mediation followed by arbitration before he is allowed to be fired. His continued employment, if it remains intact, will likely not do any favors for public goodwill.
On October 16, it was announced that The Weinstein Company secured a financial lifeline from Colony Capital, known for its experience in rescuing distressed Hollywood assets (the company famously saved Michael Jackson’s Neverland Ranch from foreclosure in 2008). Some speculate that this cash injection is the precursor to a new owner for TWC.
While Colony may have hope for TWC, other longtime media investors are questioning the wisdom of working with the toxic asset that TWC has become. The founder of Qualia Capital, Amir Malin, said that he is unsure that a company can be sold with so much litigation in its future (previous commercial lawsuits in addition to the slew of upcoming harassment and assault lawsuits).
Meanwhile, Hollywood continues its rapid detachment from TWC, with Amazon pulling the plug on a major TV deal and agents pressing the company to sell many of its near-finished films.