We­in­stein Co. un­der pres­sure

Po­ten­tial buy­ers are look­ing at parts of stu­dio roiled by sex scan­dal

Los Angeles Times - - FRONT PAGE - By Ryan Faugh­n­der and David Ng

Trou­bles are es­ca­lat­ing for Har­vey We­in­stein and his for­mer com­pany amid crim­i­nal in­ves­ti­ga­tions.

Hol­ly­wood is al­ready start­ing to kick the tires of We­in­stein Co., barely a week af­ter sex­ual mis­con­duct al­le­ga­tions sur­faced against its ousted co-founder, Har­vey We­in­stein.

Woes es­ca­lated for We­in­stein and his for­mer com­pany this week as po­lice in New York and Lon­don be­gan crim­i­nal in­ves­ti­ga­tions into al­leged sex­ual as­sault by the film pro­ducer. Ques­tions are also swirling about whether board mem­bers and other ex­ec­u­tives were aware of ha­rass­ment claims, rais­ing more doubts about the vi­a­bil­ity of the New York movie and TV stu­dio.

Stu­dios, pro­duc­tion com­pa­nies, dis­trib­u­tors and other in­vestors have been call­ing bankers to as­sess whether to bid for pieces of the com­pany, as well as film and TV projects, if the firm is un­able to stay afloat, said four en­ter­tain­ment in­dus­try ex­ec­u­tives who asked to re­main anony­mous to pro­tect busi­ness re­la­tion­ships.

The com­pany did not re­spond to re­quests for com­ment Thurs­day.

We­in­stein Co. co-Chair­man Bob We­in­stein and Pres­i­dent and Chief Op­er­at­ing Of­fi­cer David Glasser have been scram­bling to save the busi­ness as al­le­ga­tions mount against the “Shake­speare in Love” pro­ducer. Ex­ec­u­tives have made calls to cre­ative part­ners to keep them from flee­ing and have been work­ing to re­brand and carry on un­der a dif­fer­ent name af­ter cut­ting ties with Har­vey We­in­stein, who owns about 42% of the busi­ness with his brother Bob.

But the board is com­ing un­der pres­sure from its lenders to liq­ui­date We­in­stein Co.’s as­sets, said peo­ple fa­mil­iar with the mat­ter. The firm was al­ready fac­ing fi­nan­cial strains be­cause of a lack of com­mer­cial hits and in­creas­ing com­pe­ti­tion in the indie cin­ema space be­fore We­in­stein’s al­leged mis­con­duct sur­faced.

Amid the widen­ing scan­dal, Ap­ple has al­ready dropped a planned Elvis se­ries by We­in­stein Co., and Ama­zon.com has said it is re­view­ing its op­tions on its projects with the em­bat­tled firm. And Ha­chette

Book Group, one of the coun­try’s top pub­lish­ers, said Thurs­day that it has “ter­mi­nated” its deal with We­in­stein Books.

“This com­pany’s got no place to go in its cur­rent form,” said L.A. in­vest­ment banker Lloyd Greif, chief ex­ec­u­tive of Greif & Co. “The value of the busi­nesses is now in pieces, not as a whole, be­cause this is such a stain on the com­pany.”

Though We­in­stein Co. as a whole is in peril, po­ten­tial buy­ers may be in­ter­ested in cer­tain film and tele­vi­sion projects that could be in limbo if they re­main at the stu­dio. The We­in­steins had been try­ing to un­load part of their TV busi­ness, known for “Project Run­way,” for years.

Also com­pli­cat­ing mat­ters is We­in­stein Co.’s li­brary of films. In 2010, Gold­man Sachs and an in­sur­ance com­pany took pos­ses­sion of more than 200 of the stu­dio’s films as part of a debt re­struc­tur­ing. AMC Net­works later ac­quired Gold­man’s stake in the li­brary.

Con­cerns about the com­pany’s fu­ture es­ca­lated Thurs­day af­ter the New York Po­lice Depart­ment said it is seek­ing out women who may have been vic­tims of Har­vey We­in­stein’s al­leged be­hav­ior. Po­lice in New York are said to be look­ing into a 2004 in­ci­dent in which We­in­stein al­legedly sex­u­ally as­saulted an ac­tress.

“Based on in­for­ma­tion ref­er­enced in pub­lished news re­ports the NYPD is con­duct­ing a re­view to de­ter­mine if there are any ad­di­tional com­plaints re­lat­ing to the Har­vey We­in­stein mat­ter,” said Det. Sophia Ma­son of the NYPD. “No filed com­plaints have been iden­ti­fied as of this time.”

The LAPD is not cur­rently in­ves­ti­gat­ing any claims against We­in­stein.

At the same time, Lon­don law en­force­ment of­fi­cers are re­port­edly pur­su­ing their own sex­ual as­sault case against We­in­stein over an in­ci­dent that al­legedly oc­curred in the 1980s.

In ad­di­tion, We­in­stein Co. is fac­ing al­le­ga­tions that ex­ec­u­tives and board mem­bers were aware of set­tle­ments Har­vey We­in­stein had made with women since 2015. A per­son close to the board not au­tho­rized to com­ment said di­rec­tors were made aware of at least one of the set­tle­ments when We­in­stein’s con­tract was up for re­newal in 2015. His new con­tract stip­u­lated that he could be fired for vi­o­lat­ing a newly in­sti­tuted code of con­duct, the per­son said. The New York Times first re­ported the board’s knowl­edge of sex­ual ha­rass­ment claims.

The dis­clo­sure comes just two days af­ter the re­main­ing mem­bers of the We­in­stein Co. board, in­clud­ing Bob We­in­stein, de­nied hav­ing any knowl­edge of mis­con­duct, say­ing they were “shocked and dis­mayed” by re­ports. “Th­ese al­leged ac­tions are an­ti­thet­i­cal to hu­man de­cency,” the di­rec­tors said in a state­ment Tues­day. “Th­ese al­le­ga­tions come as an ut­ter sur­prise to the board. Any sug­ges­tion that the board had knowl­edge of this con­duct is false.”

The re­main­ing mem­bers of the com­pany’s board, Lance Maerov, Richard Koenigs­berg and Tarak Ben Am­mar, also signed the state­ment. Four We­in­stein Co. board mem­bers re­signed last week in re­ac­tion to the al­le­ga­tions.

The com­pany was al­ready vul­ner­a­ble to civil law­suits be­cause firms are con­sid­ered strictly li­able for sex­ual ha­rass­ment by man­agers un­der New York and Cal­i­for­nia law. But the fresh de­tails about the board’s al­leged knowl­edge are po­ten­tially even more dam­ag­ing, said Los An­ge­les at­tor­ney and for­mer fed­eral pros­e­cu­tor Manny Me­drano.

“That is pro­foundly prob­lem­atic for the board and the com­pany if it is in fact true that board mem­bers knew of this con­duct by Har­vey We­in­stein,” he said.

Mean­while, the scan­dal showed no signs of abat­ing in Hol­ly­wood. In a se­ries of tweets, ac­tress Rose Mc­Gowan ramped up her at­tack on We­in­stein and oth­ers in the en­ter­tain­ment in­dus­try in­clud­ing Ama­zon.com founder Jeff Be­zos. Mc­Gowan ac­cused Ama­zon of can­cel­ing a script she had in de­vel­op­ment at the stu­dio af­ter she raised con­cerns over We­in­stein. “I told the head of [Be­zos’] stu­dio that HW raped me,” Mc­Gowan wrote on Twit­ter, ap­par­ently re­fer­ring to Har­vey We­in­stein. “Over & over I said it.”

Al Seib Los An­ge­les Times

PO­LICE in New York and Lon­don be­gan crim­i­nal in­ves­ti­ga­tions into al­leged sex­ual as­sault by Har­vey We­in­stein, left, with brother Bob.

AFP/Getty Im­ages

Har­vey We­in­stein

Tom­maso Boddi GBK Pro­duc­tions

DAVID GLASSER, We­in­stein Co. pres­i­dent, and co-founder Bob We­in­stein are scram­bling to save the busi­ness as al­le­ga­tions mount against Har­vey We­in­stein. They’re try­ing to keep cre­ative part­ners from f lee­ing.

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