Weinstein Co. to File for Bankruptcy as Part of Deal With Lantern Capital

Updated March 19, 2018 11:16 p.m. ET

Lantern’s deal must be approved by a judge and will be subject to higher bids, should any materialize, in a sale process that will be conducted in bankruptcy court. Weinstein Co.’s board said in a statement that Lantern was chosen because of the investment firm’s “commitment to maintain the assets and employees as a going concern.”

Weinstein Co.’s board also said Monday that it is ending nondisclosure agreements that Mr. Weinstein reportedly used “as a secret weapon to silence his accusers.” The studio has been in turmoil since allegations of alleged sexual misconduct were first reported in October.

“Effective immediately, those ‘agreements’ end,” the board said in a statement. “The Company expressly releases any confidentiality provision to the extent it has prevented individuals who suffered or witnessed any form of sexual misconduct by Harvey Weinstein from telling their stories. No one should be afraid to speak out or coerced to stay quiet. The Company thanks the courageous individuals who have already come forward. Your voices have inspired a movement for change across the country and around the world. “

A bankruptcy filing will halt lawsuits that are pending against Weinstein Co. but wouldn’t halt legal actions that have also been taken against Mr. Weinstein, individually. In chapter 11, women who have sued the company over Mr. Weinstein’s alleged misconduct would see their claims for compensation fall behind banks that lent the studio money. However, women who have sued the studio will likely be represented on an official committee of unsecured creditors, which could pursue their interests in bankruptcy court.

Lantern had been backing a proposed deal to acquire the entertainment company outside of chapter 11 as part of a buyers group lead by businesswoman

Maria Contreras-Sweet

and investor

Ron Burkle.

That deal, however, fell apart in February after New York Attorney General Eric Schneiderman filed a civil rights lawsuit against the studio.

Ms. Contreras-Sweet’s group and Weinstein Co.’s board subsequently announced they had salvaged the deal only for the transaction to fall apart for a second time two weeks ago after the buyers group discovered additional liabilities, according to people familiar with the matter. The buyers would have assumed $225 million in Weinstein Co. debt and committed to invest about $275 million to launch a new company.

The Weinstein Co. board disputed the notion that the investment group had found new information.

“In the last several months, Lantern has evaluated the company and is proud to provide a solution to the board,” Lantern co-founders

Andy Mitchell

and

Milos Brajovic

said in a statement. “As with all our businesses, Lantern will improve the performance of the company’s businesses with the utmost respect to all employees and promote a diverse and transparent environment. We are grateful for everyone involved in the transaction and look forward to following through on our promise to reposition the business as a preeminent content provider, while cultivating a positive presence in the industry.”

—Ben Fritz contributed to this article.

Write to Jonathan Randles at [email protected]