Bro vs. bro in board call
Colony Capital throws The Weinstein Co. a lifeline
Harvey Weinstein and his brother, Bob, are set to square off against each other at a company board meeting Tuesday — and things are expected to get ugly, according to a report.
Harvey will be on speakerphone for the meeting at The Weinstein Company, which he and his brother co-founded, since he is in treatment for sex addiction in Arizona amid accusations of rape and other misconduct.
But Harvey is expected to make his presence felt — with cursing, screaming and threats of a lawsuit, sources with knowledge of the upcoming showdown told TMZ. Harvey’s lawyer, Patty Glaser, will be at the meeting in person to help represent him, the Web site said.
The board, led by disgusted brother Bob, is ex- pected to try to formally oust Harvey, whom it already has announced has been fired.
Glaser plans to argue that there is a 2015 provision in Harvey’s contract stipulating that as long as he reimburses the company for any costs associated with a sex-harassment claim, he can’t get the boot, TMZ said.
Board members will counter that the company’s code of conduct trumps the clause and Harvey violated it, so it’s within their power to fire him.
But Glaser is prepared to sue over any termination, sources said.
And, “There is so much crap that will be unearthed in a lawsuit, the company just can’t survive it,” a source warned.
The Weinstein Company, reeling from accusations from more than 40 women that its co-founder Harvey Weinstein sexually harassed or raped them, got a financial lifeline on Monday.
Tom Barrack’s Colony Capital, a Los Angeles private equity firm, agreed to lend the struggling studio an undisclosed amount of cash, both companies said in a terse statement.
Neither Barrack, a confidante of President Trump, not the studio said whether the cash came in the form of an equity investment or a secured loan.
But given the wobbly financial state of affairs surrounding the independent studio — which has produced “The Artist,” “Django Unchained” and “Silver Linings Playbook,” among other films — Colony most likely arranged a straight-up loan backed by some film or TV assets, entertainment insiders said.
“My gut tells me this is not an equity investment but a loan secured by certain assets or projects,” said a Wall Streeter who specializes in entertainment. “To be an unsecured equity holder at this time, given the as-yet-unknown liabilities, just seems wacky.”
Lawsuits against the com- pany could likely flow, sources said, given reports that insiders were aware of Weinstein’s actions. Such suits could push the New York studio into bankruptcy.
Equity holders often lose their entire investment in a Chapter 11 proceeding.
Debt holders, by comparison, have a higher claim on a bankrupt company’s assets.
A second Hollywood veteran noted that the studio’s banks likely protected themselves against other lenders jumping ahead of them in terms of seniority in the event of a default.
As such, Colony may have arranged a subordinated loan that’s ahead of equity but behind the banks.
Colony would not comment beyond the statement.
Weinstein, who founded the studio in 2005 with his brother, Bob, was fired on Oct. 8. Six directors also left the company.
In addition to the emergency financing, Colony was said to be in talks with the studio about the sale of certain assets.
Again, no specifics were given.
Colony is mostly known for its real estate deals, but it has also had success in distressed assets.
It bought Michael Jackson’s Neverland Ranch in 2009 for $22.5 million.
It is currently trying to sell the 4.7 square mile parcel for $67 million.
Closer to Hollywood, Colony was part of a consortium in 2010 that acquired the Weinstein brothers’ former company, Miramax, from Disney for $660 million.
Miramax was sold last year for roughly $1 billion.
In his second involvement with a Weinstein-related company, Barrack, in the statement, said the goal was to “return the company to its rightful iconic position in the independent film and television industry.”
But the studio will have to do it without Harvey — and without elaborating, Barrack, in the statement, said “Neither the company nor Colony will make any further comment beyond this announcement at this time.”