After last-minute negotiations, the Weinstein Company has reached an agreement to sell its assets to an investor group led by Maria Contreras-Sweet, who previously ran the Small Business Administration under Obama, and Ron Burkle, a billionaire investor. As part of the agreement, a number of former Weinstein executives were let go or had their equity liquidated, and the new company that will be formed with Weinstein assets pledged to institute new HR policies, create a $90 million victims’ compensation fund, and “build a movie studio led by a board of directors made up of a majority of independent women.”
The deal initially looked like it would fall apart near the end of February, and the Weinstein Company would instead file for bankruptcy. However, Contreras-Sweet and Burkle enlisted the help of New York Attorney General Eric Schneiderman to revive negotiations, and they were eventually able to reach an agreement with the board. As Variety noted, many Weinstein employees were “angry and fearful of layoffs that would result from bankruptcy.”
As part of the deal, Harvey Weinstein will have his equity wiped out; David Glasser, who served as COO during Weinstein’s tenure, was fired “with cause”; and Bob Weinstein will have to leave the company, though he takes Dimension and the film Polaroid with him. The new company plans to rehire all current employees, and it will provide a victims’ compensation fund, which Attorney General Schneiderman pushed them to increase to $90 million.
Schneiderman expressed his satisfaction with the final deal in a statement to Deadline. “As I made clear from the start, our office will support a deal that ensures victims will be adequately compensated, employees will be protected moving forward, and those who were responsible for misconduct at TWC will not be unjustly rewarded,” he said. “As part of these negotiations, we are pleased to have received express commitments from the parties that the new company will create a real, well-funded victims compensation fund, implement HR policies that will protect all employees, and will not unjustly reward bad actors.”
He also offered assurances that he would follow up on the agreement. “We will work with the parties in the weeks ahead to ensure that the parties honor and memorialize these commitments prior to closing,” he added. “Our lawsuit remains active and [our] investigation remains ongoing at this time.”
Schneiderman filed a civil rights lawsuit against the Weinstein Company in mid-February, which alleged that the company created “a years-long gender-based hostile work environment, a pattern of quid pro quo sexual harassment, and routine misuse of corporate resources for unlawful ends.” Given that the sale of the company included a victims’ compensation fund and new HR stipulations, which he had insisted on, he may settle with the company – but as his statement made clear, that’s no guarantee as the “investigation remains ongoing.”
Contreras-Sweet also issued a statement, pledging to “launch a new company, with a new board and a new vision that embodies the principles that we have stood by since we began this process last fall.” Those principles, she continued, “have always been to build a movie studio led by a board of directors made up of a majority of independent women, save about 150 jobs, protect the small businesses who are owed money and create a victims’ compensation fund that would supplement existing insurance coverage for those who have been harmed. The cornerstone of our plan has been to launch a new company that represents the best practices in corporate governance and transparency…. I have had a long-standing commitment to fostering women ownership in business. This potential deal is an important step to that end.”
As the Los Angeles Times points out, this is welcome news, but in many ways the hard work is just beginning for Contreras-Sweet. Who will they hire as COO? What kind of films will they fund? But in declaring an emphasis on female leadership and fair compensation for victims, she’s off to a promising start.
(via Glamour; image: The Weinstein Company)
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