The scandal-hit movie and TV firm has coupled its move to seek bankruptcy protection with a decision to scrap all nondisclosure agreements, which were preventing many victims and witnesses from speaking out.
In the latest twist in efforts to survive the sexual misconduct scandal that brought down co-founder Harvey Weinstein, The Weinstein Company (TWC) filed for bankruptcy protection with a buyout offer from a private equity firm.
The company also announced that it was releasing any victims of, or witnesses to, Weinstein's alleged misconduct from nondisclosure agreements, which had made it impossible for them to speak out. That step had long been sought by New York Attorney General Eric Schneiderman, who filed a lawsuit against the company last month on behalf of its employees.
Since October, it has been reported that Harvey Weinstein used nondisclosure agreements as a secret weapon to silence his accusers, the company acknowledged in a statement — "effective immediately, those agreements end."
The movie and TV studio becomes the first high-profile firm to be forced into bankruptcy in the nationwide outcry over workplace sexual misconduct.
The company reported that had it entered into what experts called "a stalking horse contract" with an affiliate of Dallas-based Lantern Capital Partners, meaning the equity company had agreed to buy TWC, with the deal subject to approval by the US Bankruptcy Court in Delaware.
Lantern was among a group of investors who had been in talks for months to buy TWC. The company reports that it is committed to keeping on the studio's employees.
Under bankruptcy protection, civil lawsuits filed by Weinstein's accusers will be halted and no new legal claims can be brought against the company. Also, secured creditors will get priority for payment over the women suing the firm.
However, Eric Schneiderman's lawsuit will not be affected as it was filed by a law enforcement agency.
He said his investigation would continue and that his office would engage with The Weinstein Company and Lantern to ensure "that victims are compensated, employees are protected moving forward, and perpetrators are not unjustly enriched."
hg/jd (AP, Reuters)