The frontrunner to acquiring the embattled Weinstein Company is considering pulling out from the race after New York’s attorney-general sued the film studio and its co-founder Harvey Weinstein, said people briefed about the sale process.
A group of investors led by Maria Contreras-Sweet, a former Obama administration official, has been in talks for several months to buy the TWC, which has been on the verge of collapse since allegations of serial sexual misconduct by Mr Weinstein.
TWC is still seeking buyers, but given the lawsuit against the New York-based company and its founders, it is unclear whether a deal can be agreed at all at this stage, said one person close to the film studio.
Ms Contreras-Sweet has not officially communicated that she was withdrawing her bid, said another person briefed about the talks.
The lawsuit filed by Eric Schneiderman, the state’s top prosecutor, follow a four-month investigation into TWC. The complaint alleges “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” dating back to 2005, the year Mr Weinstein founded the company with his brother Bob, who is also named in the suit.
The complaint alleges that Mr Weinstein engaged in a long-running pattern of harassment and abuse, and that the company failed to investigate or stop it. It accuses the brothers and TWC of “repeated, persistent, and egregious violations of law”.
“The Weinstein Company repeatedly broke New York law by failing to protect its employees from pervasive sexual harassment, intimidation, and discrimination,” said Mr Schneiderman on Sunday.
Since the first allegations against him emerged publicly in October, Mr Weinstein has been accused by more than 80 women of harassment or assault. He denies all allegations of non-consensual sex. He was fired from TWC in October and is under criminal investigation by police in New York, Los Angeles and London.
The studio he founded has also been in crisis since the accusations against its former chief executive came to light. It has struggled to secure its survival in the wake of cancelled projects and the resignation of most of its board.
TWC has been pursuing a sale for some time. It hired the investment bank Moelis & Company and received interest from a number of bidders, including the group led by Ms Contreras-Sweet and another coalition led by Killer Content, which includes the New York Women’s Foundation and producer Abigail Disney.
Mr Schneiderman said on Sunday that while his office’s investigation was continuing, he had decided to file the lawsuit in part due to reports of the “imminent” sale of the company.
“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,” he said.
He added that his office “believes that the proposed terms of the sale would allow the perpetrators or enablers of the misconduct to see a windfall, and allow top officials at TWC who share responsibility for the misconduct to serve in executive positions of the new entity — where they would again oversee the adjudication of HR complaints, including those of sexual harassment, intimidation, and assault”.
In a statement, Ben Brafman, attorney for Mr Weinstein, said: “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 behaviour 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.”
TWC did not respond to a request for comment.
Get alerts on Harvey Weinstein when a new story is published