Thomas J. Barrack Jr.’s company, Colony Capital, has decided to withdraw its planned cash infusion to Harvey Weinstein’s struggling Weinstein Co., the New York Times reported.
It reached a preliminary agreement last week to buy “all or a significant portion” of the company, but upon further examining its assets, found less value than originally anticipated in the troubled film studio. In fact, Colony foresaw bankruptcy as a likely next step for the Weinstein Co., according to sources familiar with the deal.
Barrack, who has a habit of saving distressed Hollywood elites such as Michael Jackson, likely also faced backlash for getting involved in the deal, as women have been coming out with sexual harassment and rape allegations against the producer — who has been fired from the company — in droves. More than 50 women have come forward with allegations against Weinstein so far.
Weinstein Co. still has a bailout option. Fortress Investment Group, a private equity firm that has saved struggling film companies in the past, is considering a financing package of roughly $35 million that could sustain the studio through January.
The studio was having financial troubles even before Weinstein’s behavior came under the spotlight. It tried to move into the television sphere after its film debuts became sporadic, and even sold a large chunk in 2010 to prevent bankruptcy. [NYT] – Natalie Hoberman