(JTA) — The Weinstein Company will declare bankruptcy after a $500 million deal to sell the production company fell through.
The company, which has struggled to stay solvent since allegations of sexual misconduct against co-owner Harvey Weinstein were made public in October, made the announcement late Sunday night in a statement. Weinstein’s brother, Bob, is a co-owner.
Harvey Weinstein was dismissed from the company shortly after dozens of women came forward to make public accusations.
“While we recognize that this is an extremely unfortunate outcome for our employees, our creditors and any victims, the board has no choice,” the company said in the statement. “Over the coming days, the company will prepare its bankruptcy filing with the goal of achieving maximum value in court.”
The deal reportedly fell through after the group of investors in negotiations to buy the company did not agree to provide interim funding to keep the 150-employee studio in operation until the final deal was signed. The group had offered to pay approximately $275 million for the Weinstein Company, plus the assumption of $225 million in debt.
Expected to be finalized two weeks ago, the sale was delayed after the State of New York filed a lawsuit against the Weinstein brothers and their production company for violating laws against sexual harassment and sexual abuse. The civil rights lawsuit calls for the defendants to pay restitution and damages to the victims, something that had not been provided within the framework of the sale.
The deal was said to include tens of millions of dollars for victims of Harvey Weinstein and a mediation process for reaching settlements, according to The New York Times.