Weinstein Co. Files for Bankruptcy and Voids Nondisclosure Pacts

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March 20, 2018 5:18 AM

LOS ANGELES — The Weinstein Co. clung to life longer than anyone in Hollywood expected following a sexual harassment scandal so big that it started a global workplace reckoning.

But the troubled studio finally flatlined.

The Weinstein Co. filed for bankruptcy protection late Monday in U.S. Bankruptcy Court in Delaware. The company had been struggling after one of its co-founders, Harvey Weinstein, was fired as chief executive in October after women publicly accused him of sexual misconduct stretching back decades.

The studio said in a statement that it had lined up Lantern Capital Partners, a Texas private equity firm, as a “stalking horse bidder,” so called because it is the first bidder in the bankruptcy process, which allows a distressed company to avoid low bids on its assets.

Lantern Capital will now have to compete with other potential buyers in a court-supervised auction.

As part of the Chapter 11 bankruptcy filing, The Weinstein Co. said it released anyone “who suffered or witnessed any form of sexual misconduct by Harvey Weinstein” from nondisclosure agreements. The move had been advocated by Eric Schneiderman, the New York state attorney general, who is investigating wrongdoing at the studio. Weinstein was able to cover up allegations of misconduct for so long in part by relying on the unusually restrictive agreements.

Spokeswomen for Weinstein have denied that he ever engaged in “nonconsensual sex.” He has spent recent months seeking treatment for sex addiction and anger management, according to his representatives.

Weinstein has legal problems apart from the bankruptcy case. Prosecutors are pursuing possible criminal cases against him. A lawsuit filed last month by Schneiderman will continue. Weinstein also faces additional civil suits, including one filed by British actress Kadian Noble, who is suing him for sex trafficking.

But the bankruptcy filing does halt an array of lawsuits against the company, including those filed by women who contend that the studio facilitated misconduct by Weinstein. Those women will now have to line up behind the studio’s secured creditors.

The filing, which was expected, ended a five-month effort to keep The Weinstein Co. afloat.

This article originally appeared in The New York Times.

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