EXCLUSIVE: An important meeting has gotten underway in New York that might well determine whether the beleaguered The Weinstein Company will see its assets sold to Maria Contreras-Sweet, Ron Burkle and Lantern Capital for $500 million and turned into a new company with a female-centric board, or whether it will fall into a 363 or Chapter 7 bankruptcy filing.
Sources said that the meeting in New York includes Burkle, New York Attorney General Eric Schneiderman, and possibly TWC board members Lance Maerov and Bob Weinstein. In movie terms, Schneiderman’s role has surprisingly evolved from an antagonist whose lawsuit filing potentially scuttled a nearly closed deal, into the protagonist who is trying to salvage it. If common ground is reached, it opens up a possible scenario where the AG would alter his civil rights suit that named everyone from Harvey and Bob Weinstein to the board. The AG investigation continues apace, but some of the parties in that suit could be dropped in a settlement. That would leave on the hook Harvey Weinstein, who caused the company to implode and has myriad criminal and civil actions coming.
The bidders were close to a deal with the AG when the board announced the deal was off because the bidder refused to float $7 million in bridge funding until they were sure the deal was going to close. The company is running out of money.
Schneiderman has as much at stake as everyone else, because the only certainty in bankruptcy is the whopping fees paid to lawyers, bankers and others to facilitate it. The Relativity bankruptcy saw more than $50 million dispersed in fees. If the company goes the 363 route, the same bidders will get another crack — the ones who were bridesmaids when the TWC board entered into exclusive negotiations for the bid by Contreras-Sweet, Burkle and Lantern Capital. If the company hits bankruptcy, the stalking horse suitors have the benefit of buying assets that are unencumbered by debt and liabilities, including those from Harvey Weinstein.
The exposed parties are the vendors who would have been paid under the original deal, the employees who could be out of jobs, and the victims of Harvey Weinstein who’ll have to get in line behind institutional creditors. If the deal makes, Schneiderman not only can feel good about the $30M-$40M that will be set aside for victims (added to the $60M insurance policies that will be tapped). The AG might well be able to take credit for saving the deal.