Disgraced mogul Harvey Weinstein has resigned from the board of The Weinstein Co.
On Tuesday, the remaining members of the TWC board — including co-chairman Bob Weinstein — voted to ratify Harvey’s Oct. 8 termination as co-chairman, and to consider an immediate capital infusion from Tom Barrack’s Colony Capital that opens the door for Colony to buy the film and television production venture, or a significant portion of its assets.
Harvey — who owns 23 percent of TWC — called into the board session, according to
insiders. Powerhouse litigator Patricia Glaser is representing him in regards to his termination and his stake in the company.
Harvey was fired following an exposé in The New York Times that detailed numerous allegations of sexual harassment on the part of the mogul.
His brother Bob and COO David Glasser believed the company could weather the scandal, but more serious allegations of sexual misconduct, including rape, were raised in subsequent stories in The New Yorker and the Times, throwing TWC into a state of chaos.
“The Weinstein Co. is probably not saleable to a public media company at the moment and PR would be unbearable,” says Ben Weiss, chief investment officer at 8th & Jackson Capital Management.
“Colony could acquire the intellectual property, including the development pipeline, programing slate and library rights, at a discount to market prices because of the turmoil. Colony can rebrand it, appropriately capitalize in more IP, and then sell it to a strategic buyer down the road, possibly in a tax-efficient equity swap, for a large premium.”
Some, though, don’t see TWC ever returning to its glory days as a producer of high-profile, Oscar-winning films that return significant profits.
“I can’t imagine go-forward projects will last, and we have already seen cancellations,” says Steven Birenberg of Northlake Capital Management. “I’d imagine they got good terms and see value against those terms. The library must have value.”