The Weinstein Company and lenders engage restructuring professionals to prep for potential bankruptcy filing

07 November 2017
With allegations against Harvey Weinstein mounting, his namesake company and its lenders are making preparations for an increasingly likely Chapter 11 filing, said three sources familiar with the matter.
 
The Weinstein Company (TWC) recently engaged the consulting firm FTI to advise on restructuring contingencies, said two of the sources. Meanwhile, TWC lenders have engaged the law firm Sidley Austin to help chart a restructuring path, and are currently holding pitches to also appoint their own financial advisor, the sources added.
 
The law firm O’Melveny & Myers is serving as restructuring counsel to the company, while the investment bank Moelis is serving as financial advisor to the company’s board of directors, the sources continued. The Moelis and O’Melveny mandates surfaced previously in media reports.
 
TWC has been trying to shop itself to prospective buyers including Colony Capital, though Colony has recently dropped out of the process, according to reports.
 
The likelihood of significant legal claims against the company related to Weinstein’s alleged sexual crimes, and uncertainty over how its now-toxic name brand will fare in future business prospects, make it unlikely for a deal to be struck out of court, the sources speculated. As such, while the company is still trying to find a white knight, it’s increasingly likely that any sale would come in the context of a 363 bankruptcy auction, they continued.
 
The company has raised several loan facilities in recent years, including a USD 370m senior secured credit facility led by CIT, and a USD 400m senior credit facility with MUFG Union Bank as agent that lenders including Opus Bank participated in. AI International Holdings, a division of billionaire Len Blavatnik’s Access Industries, this week demanded immediate repayment of a recent USD 45m loan to the company, alleging that Weinstein’s dismissal constitutes a “material adverse change,” according to reports.
 
The Weinstein Company did not respond to requests for comment. O’Melveny, Sidley, and FTI, CIT, MUFG, and Opus also did not respond to inquiries. Moelis declined to comment.