PE Firm to Give Weinstein Co. Cash Infusion

“We will help return the company to its rightful iconic position in the independent film and television industry,” Colony Capital's founder says.
Matthew HellerOctober 17, 2017

Private-equity firm Colony Capital may be coming to the rescue of The Weinstein Company as the film studio fights for survival in the wake of the demise of co-founder Harvey Weinstein.

TWC said Monday it had entered into a preliminary agreement with Colony to provide it with an immediate capital infusion and that it is also negotiating with Colony for a potential sale of all or a significant portion of its assets.

Colony, the private equity arm of real estate investment firm Colony NorthStar, previously saved Michael Jackson’s Neverland Ranch from foreclosure and was part of an investment group that bought Miramax, the original studio founded by the Weinstein brothers, from Disney in 2010.

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“We believe [TWC] has substantial value and growth potential, and we look forward to working with the Company’s critical strategic distribution and production partners to help preserve and create value for all stakeholders, including its employees,” Colony founder Thomas Barrack said in a news release.

“We will help return the company to its rightful iconic position in the independent film and television industry,” he added.

The statement made no mention of a possible deal value and, as Variety reports, “It’s unclear if all of the members of the [TWC’s] leadership endorse such a deal.” Co-founder Bob Weinstein on Friday denied the company was for sale.

Also looming over a deal is the potential for lawsuits against TWC related to Harvey Weinstein’s alleged sexual misconduct.

According to Reuters, one possible scenario would involve Colony’s outright acquisition of all of TWC, with an escrow account being negotiated to cover legal liabilities. Alternatively, TWC would file for bankruptcy with Colony as a “stalking horse” bidder, which would shield Colony from having to assume TWC’s legal liabilities.

“I don’t think you can sell this company with all the litigation you’re looking at,” Amir Malin, the founder of media investment firm Qualia Capital, told The New York Times.

Deadline pointed to “One major question that the Colony infusion, and even its potential ownership of TWC, does not answer … Will talent resume working with the company even when it is re-branded?”