A group of investors pulled out of a deal to buy the beleaguered Weinstein Co. on Tuesday after discovering tens of millions of dollars in undisclosed debt, according to people familiar with the negotiations. Businesswoman Maria Contreras-Sweet, who has been leading the group of buyers along with billionaire investor Ron Burkle, said in a statement that "disappointing information about the viability of completing this transaction" had led her to call off the sale, the AP reports. She didn't offer further details. But two people familiar with the proceedings said the buyers came across documents showing liabilities beyond the $225 million the buyers had been prepared to take on. One of the people said the documents showed $64 million in additional debt. Both people spoke on condition of anonymity because they weren't authorized to discuss private negotiations publicly.
The Weinstein Co. has been trying to stave off bankruptcy since sexual assault and harassment allegations emerged last fall against its co-founder Harvey Weinstein. Contreras-Sweet's buyout offer had presented the best hope for avoiding that fate. But the deal was plunged into turmoil after New York State Attorney General Eric Schneiderman filed a lawsuit against the studio last month. The announcement came just days after Contreras-Sweet and the Weinstein Co. revived the deal following arduous negotiations with Schneiderman. It marks the second time in two weeks that the sale has been called off. The first time, it was the Weinstein Co. that pulled out, announcing it would file for bankruptcy protection because the buyers had failed to live up to commitments. Talks to revive the deal resumed soon afterward. It was unclear if there is any chance of reviving the sale. One of the people close to the talks said, "the deal is dead."
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