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Summary: New York Attorney General Eric Schneiderman filed a lawsuit against the troubled Weinstein Company.
An investment group planned to buy the Weinstein Company, but this acquisition may go on hold because of a lawsuit filed by the New York Attorney General.
Variety reported that New York Attorney General Eric Schneiderman filed a lawsuit on Sunday afternoon against the Weinstein Company, and the suit has raised concerns about the film company’s soon-to-be CEO David Glasser.
Glasser was a longtime Weinstein Company executive who was slated to become the CEO after the company was acquired by an investor group led by Maria Contreras-Sweet.
Under the pending deal, Contreras-Sweet would have purchased the Weinstein Company for $500 million, and they would have also bought the company’s assumed debt of $225 million. The deal was supposed to be announced on Sunday or Monday, but Schneiderman’s lawsuit “threw an eleventh-hour wrench into the process,” according to Variety.
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Schneiderman’s office accused Glasser of failing to protect Weinstein Company employees from Harvey Weinstein’s sexual misconduct. In the lawsuit, they sought to oversee the company’s employment practices, and the investor group, backed by billionaire Ron Burkle, reportedly balked at this idea. Contreras-Sweet, who spoke with Schneiderman’s office over the weekend, was also reluctant to close the deal after learning of the AG’s oversight proposals.
“Schneiderman’s office sought extensive oversight over management hires and employment policies at the new company. The office was especially keen to have supervision over the company’s sexual harassment policies, including provisions to ensure that complaints remain anonymous and do not result in retaliation. The office also wanted the company to release current and former employees from their non-disclosure agreements to facilitate further investigation,” Variety wrote.
The attorney general’s office also wanted the Weinstein Company to adequately compensate alleged victims with a fund that had as much as $50 million, a sum that is far beyond the company’s insurance coverage. However, Contreras-Sweet did not seem to like that idea.
“We expressed to them how important it is that any deal adequately compensate victims, protect employees, and not reward those who enabled or perpetuated this egregious sexual misconduct,” Amy Spitalnick, a spokesperson from Schneiderman’s office told Variety. “We were surprised to learn they were not serious about discussing any of those issues or even sharing the most basic information about how they planned to address them.”
Contreras-Sweet’s group is deliberating what to do next. The lawsuit will not affect the company’s sale, but it would effect the company’s operations which is a concern for the buyer.
The Weinstein Company was a prominent independent film company founded by Harvey Weinstein and his brother Bob Weinstein. In October, the New York Times published an expose of how Harvey had sexually harassed or abused actresses and employees for almost three decades, and his behavior was allegedly faciliated by talent agents, assistants, and executives at the Weinstein Company.
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