This week, the number of women reportedly accusing producer Harvey Weinstein of sexual harassment and assault grew to more than 60. Added to that are allegations that the board wrote a weak employment contract, allowing Weinstein to simply pay a fine if the company was forced to settle claims.
Amid the ongoing scandal, the future of The Weinstein Co. remains uncertain. Two possible options: declaring bankruptcy or being acquired by an outside company.
Meanwhile, the finger pointing has begun. Those associated with Weinstein are trying to defend themselves against allegations that they knew about his past behavior and did nothing.
While Weinstein’s lawyers deny any non-consensual relationships, projects have fallen away, staff are exiting, and two thirds of the company's board have quit.
The board suggests their efforts to rein in the excesses of Weinstein were blocked by his lawyer David Boies, according to The Financial Times. Board members told the newspaper on Friday that Boies prevented them from seeing Weinstein’s personnel file — a contention that Boies denies in the FT article.
Just days ago, a group of employees, in an open letter sent to The New Yorker, put the blame at the door of the board. The letter states, “Practically none of us have ever met the board. Aside from Bob Weinstein, few of us even knew their names before last week. If the board’s job was to keep Harvey in check, financially and otherwise, they failed."
And so, the recriminations begin.
"In the movie business, you are only as good as your next movie, not your last one," says Ben Waisbren, president of film investment fund LSC Film Corp. and a board member of Europe’s Wild Bunch AG. (The company has partnered with Weinstein Co. in the past).
A former head of restructuring at investment bank Salomon Brothers, which is now a part of Citigroup, Waisbren is currently advising the Justice Department in its forfeiture action involving Red Granite Pictures.
He explains the extent to which the company is cornered.
The Weinstein Co. "apparently does not have the liquidity necessary to release finished pictures, let alone produce new movies or TV series. Their past successes are now irrelevant,” Waisbren said.
He sees a chapter 11 bankruptcy on the horizon for Weinstein Co. Colony Capital has provided life line financing for the troubled company and was negotiating a potential acquisition. That is yet to materialize and Colony is currently looking over the books, according to sources.
"Because TWC [The Weinstein Co.] requires additional risk capital to acquire, produce and release product, and remain a going concern, I am certain TWC will file a Chapter 11 petition within the next three months," Waisbren said. "A sophisticated investor like Colony Capital will not invest equity or buy the assets without the comfort of a bankruptcy court order blessing the deal and shielding those assets from claims made by others, including claims arising from Harvey’s actions.”
A spokesman for the board did not return NBC News' request for comment.
One financial executive said that contingent liabilities, the amount expected to be spent on legal costs, is what's most uncertain right now and what could push the company toward declaring bankruptcy.
A Forbes report cited an expert suggesting claims against The Weinstein Co. could be anywhere between $20 million to $40 million.
The financial executive however thinks a sale of the company is more likely than bankruptcy, as long as there's a hold back for legal claims. Both A&E Networks and Viacom have said they will continue to air shows made by The Weinstein Co. Meanwhile, the Lifetime channel continues to air the long-running reality series “Project Runway,”
Two potential bidders were named in a Financial Times piece last week: Ron Burkle, the private equity and venture capital mogul, and Len Blavatnik, the multi-billionaire owner of Warner Music Group.
NBC News confirmed that Blavatnik is keeping a close watch on proceedings, though no bids have been made.
Warner Music Group invested money in some Weinstein Co. movies a few years ago and wants to protect its investment, a source familiar with conversations said.
Burkle, who owns the Pittsburgh Penguins and a stake in film and media membership club, Soho House, is also eyeing keeping a close watch on developments, a representative said.
“We have several projects in The Weinstein Company film library and we are following the situation closely," the spokesperson said. "We have not made any overtures."