New Lawsuit Blocks Sale of Weinstein Company

The end of an era for the Weinstein Company was supposed to be imminent this Sunday when, just over four months after detailed reports of Harvey Weinstein’s personal misconduct broke first in The New York Times and then The New Yorker, the studio was slated to be sold off to an investor group led by Maria Contreras-Sweet to the tune of nearly $500 million. But a new lawsuit brought forward by New York attorney general Eric T. Schneiderman threw up a legal roadblock; the Weinstein Company will face charges of violating state and city laws barring gender discrimination, sexual harassment, sexual abuse and coercion. In the wake of Schneiderman’s legal move Sunday, The New York Post reports Contreras-Sweet withdrew her offer.

Contreras-Sweet has little Hollywood experience. She is best known as an Obama-era cabinet member in charge of the Small Business Administration, and, as the New York Times reported, won the bid to buy the Weinstein Company over several other potential investors by promising to keep the studio intact and keep the current staff—about 150 jobs—as well as top employees including senior manager David Glasser whom the Weinsteins have referred to as “a third brother,” according to the New York Times. Glasser’s continued association with the company reportedly worried Schneiderman who said via news release Sunday: “Any sale of the Weinstein Company must ensure that victims will be compensated, employees will be protected going forward, and that neither perpetrators nor enablers will be unjustly enriched.”

Glasser was named alongside dozens of other Hollywood luminaries and D.C. players in a December New York Times report titled “Weinstein’s Complicity Machine.” With Bob Weinstein being forced to resign and neither Bob nor Harvey receiving any cash from the sale as conditions of Contreras-Sweet’s offer, it’s Glasser, at least, who remained a sticking point with Schneiderman. The Post reports: “Schneiderman believes Glasser did not do enough to protect employees.”

According to The Post, Contreras-Sweet was left out of The Weinstein Company’s negotiations with the attorney general which resulted in promising Schneiderman he could install a monitor from the A.G.’s office on The Weinstein Company’s new board of directors. Variety reports: “The attorney general’s office first contacted Contreras-Sweet last week, but the Weinstein Co. board initially prevented her from returning the call due to a non-disclosure agreement. When Contreras-Sweet and her representatives finally got in touch with Schneiderman’s office over the weekend, and learned of the potential conditions, she became reluctant to move forward.”

Contreras-Sweet had reportedly planned to install a majority female board of directors as well as compensate victims of alleged abuse of Harvey Weinstein. The Post reports that the Contreras-Sweet-led group had “pledged the profits from five future movies [totally approximately $50 million] to victims.” Lawyer Gloria Allred who represents a number of the women accusing Weinstein had given the Contreras-Sweet deal her blessing.

The Contreras-Sweet deal would have reportedly kept The Weinstein Company clear of having to file for bankruptcy—a fate it has managed to avoid thus far thanks to the worldwide success of Paddington 2. But production and development on all future film projects are in a holding pattern and without any money from a new deal, the company may face Chapter 11. A number of other potential bidders including Lionsgate studio, were requiring TWC file for bankruptcy as part of any deal to buy in order to inoculate themselves against future liabilities. With Contreras-Sweet most likely out, they may yet get their wish.

Late Sunday, Weinstein’s attorney Ben Brafman furnished Deadline with a response to news of the lawsuit:

We believe that a fair investigation by Mr. Schneiderman will demonstrate that many of the allegations against Harvey Weinstein are without merit. While Mr. Weinstein’s behavior was not without fault, there certainly was no criminality, and at the end of the inquiry it will be clear that Harvey Weinstein promoted more women to key executive positions than any other industry leader and there was zero discrimination at either Miramax or TWC.

If the purpose of the inquiry is to encourage reform throughout the film industry, Mr. Weinstein will embrace the investigation. If the purpose however is to scapegoat Mr. Weinstein, he will vigorously defend himself.

This lawsuit is only the latest in a string of legal nightmares facing Weinstein and company.

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