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Economy & Business

Weinstein Co. Files For Bankruptcy Months After Sexual Misconduct Allegations

DAVID GREENE, HOST:

The Weinstein Company, the once-mighty movie studio, has filed for bankruptcy. The company has been in financial trouble ever since its co-founder Harvey Weinstein was accused of sexual harassment, assault or rape by dozens of women. Reports about Weinstein were the catalyst of the current #MeToo movement. Joining us to talk about this is Ryan Faughnder. He's been reporting on this story for the Los Angeles Times.

Ryan, good morning.

RYAN FAUGHNDER: Good morning.

GREENE: So what led to this bankruptcy filing?

FAUGHNDER: The Weinstein Company was actually in pretty dire straits before Harvey Weinstein was accused of all of these sexual harassment and sexual assault claims. So they had debts piling up. They hadn't had a major hit in a number of years. And they'd even lost some of their luster at the Oscars, which was kind of their calling card. And so this was in a way kind of inevitable.

GREENE: Well, so we have some women who have accused Weinstein. They still want to sue the company. Can they still do that if - once bankruptcy is declared?

FAUGHNDER: So once bankruptcy's declared - and this is Chapter 11 bankruptcy - all of the pending claims against the Weinstein Company are - basically hit pause. Now, there's still an ongoing investigation by the New York attorney general's office, and there's still a bunch of lawsuits against Weinstein himself and Bob Weinstein, his brother and co-founder. But yeah, the idea of a bankruptcy is you basically get protection while you reorganize and try to sell your assets.

GREENE: So another implication of this is that employees at the company might be released from any nondisclosure agreements. And I mean, it - they were widely blamed for keeping Weinstein's alleged victims silent and also making sure employees who might have witnessed harassment not being able to come forward. Is that now going to change?

FAUGHNDER: I have a couple questions about how that's going to work now because there were a lot of questions about how enforceable these agreements were in the first place. So I am curious how much of this is just more a way to put some good PR on an otherwise pretty terrible situation for employees there. They've already lost about 25 percent of their staff.

Also, the previous bid on the Weinstein Company was promising to put in place this restitution fund, basically a mediation fund worth $90 million. And it's not clear where that stands now. So I have a lot of questions about what the future of the employees is and then this idea of compensating the victims of Weinstein's behavior.

GREENE: So you're saying that that there might be some spin going on that, oh, you might lose your jobs, but the NDA might be lifted, so that might be one good thing. You can come forward and be honest. And you're saying, it's not clear that's going to happen.

FAUGHNDER: If there is anything that we can rely on from this process so far - is that there's going to be a lot of spin involved.

GREENE: And I'm sure one thing they might be trying to put the best face on is how many employees could lose their jobs in a bankruptcy. Do we know how hard employees are going to be hit through this?

FAUGHNDER: It's not really clear. We know from the filings that they have about 85 employees working full-time there right now. I've never covered a bankruptcy where there weren't layoffs, so the idea that any sale through bankruptcy would save all these jobs is suspicious to me.

GREENE: Can you just step back and put this in perspective? I mean, this is a company that was probably one of the most well-known, influential in all of entertainment. Is that fair to say?

FAUGHNDER: It is if you put it in context of how the Weinstein brothers really shaped up the way that the indie film business has operated since the late-'80s. They really transformed the way that the indie film business is done, and the Weinstein Company was really a follow-up to their days in Miramax. And it had some successes, but the degree to which the Weinstein Company was a big player at the Oscars is sort of in question now because it really hasn't been that much of a player in recent years.

GREENE: Ryan, thanks for talking to us this morning.

FAUGHNDER: Thanks for having me on.

GREENE: We were talking to Ryan Faughnder, who is a reporter for the LA Times. Transcript provided by NPR, Copyright NPR.