Plans to sell Harvey Weinstein’s movie company reportedly crumbled on Sunday after New York’s attorney general filed a lawsuit against the studio and its co-founders, accusing them of committing civil and human rights violations.
A group headed by former Small Business Administration chief Maria Contreras-Sweet was expected to finalize a roughly $500 million deal ― which included the assumption of debt ― to purchase Weinstein Co., The Wall Street Journal reported.
Just before the deal was signed, Attorney General Eric T. Schneiderman filed his lawsuit, which demands civil penalties and victim compensation should any sale of the company be made.
“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,” Schneiderman said in a statement.
Contreras-Sweet’s investor group has previously said that it would create a settlement fund for women who have accused Weinstein of abuse, should the company’s purchase be finalized.
Weinstein Co.’s board, responding to news of Schneiderman’s lawsuit, has disputed the accuracy of “many of the allegations” against the company.
“We are disappointed that the New York attorney general felt it necessary to file” the lawsuit, the board said in a statement obtained by the WSJ. “Many of the allegations relating to the board are inaccurate and the board looks forward to bringing the facts to light as part of its ongoing commitment to resolve this difficult situation in the most appropriate way.”
The company, which reportedly has debts totaling $225 million, could be forced into bankruptcy if it is unable to find a buyer, according to The New York Times.
Weinstein was fired from his company in October after widespread allegations of sexual misconduct and assault against him emerged. Multiple actresses have shared detailed recounts of the abuse they say they experienced at his hands, including Rose McGowan, Daryl Hannah, Mira Sorvino, Ashley Judd and Asia Argento.
Bob Weinstein, Weinstein’s brother and business partner, is among those accused of having had knowledge of the misconduct.
Contreras-Sweet headed the SBA under former President Barack Obama from 2014 until early 2017. She founded ProAmerican Bank in Los Angeles, which focused on serving businesses in the Latino community.