The dilemma that faces Hollywood movie production firm The Weinstein Company took a new twist on Monday as it emerged it had struck a deal with a private equity firm to receive an immediate injection of cash, and which sets the scene for a potential sale of all or some of its assets.
It has struck an agreement with Colony Capital, the private equity business of Colony NorthStar (NYSE: CLNS), which will provide immediate cash, the figure was not divulged, and it has also entered a negaotioating period with Colony for the sale of all or some of its assets.
The company and co-founder Harvey Weinstein has not been out of the headlines of late - the latter facing allegations of rape and sexual assault over many years.
Many lawyers say the firm, behind such movies as The Kings Speech and Shakespeare in Love, has little chance of surving.
It is vulnerable to potential investor and victim lawsuits despite claims by the board – which includes Harvey’s brother, Bob Weinstein – that it had no knowledge of any misconduct.
A board member with the firm said in a regulatory release today: "On behalf of the board, we are pleased to announce this agreement and potential strategic partnership with Colony Capital.
"We believe that Colony's investment and sponsorship will help stabilize the company's current operations, as well as provide comfort to our critical distribution, production and talent partners around the world.
"Colony's successful experience and track record in media and entertainment will be invaluable to the company as we move forward.”
Thomas J. Barrack, Jr., Founder and executive chairman of Colony Capital added: “We are pleased to invest in The Weinstein Company and to help it move forward."