February 27, 2018 / 10:49 PM / 2 years ago

Exclusive: The Weinstein Co creditors launch bid to protect collateral - sources

(Reuters) - The Weinstein Company’s creditors are seeking to provide a $25 million loan that would finance the U.S. movie and TV studio during its upcoming bankruptcy and help protect their collateral, people familiar with the matter said on Tuesday.

FILE PHOTO: Harvey Weinstein speaks at the UBS 40th Annual Global Media and Communications Conference in New York, NY, U.S., December 5, 2012. REUTERS/Carlo Allegri/File Photo

The creditors, the company’s group of bank lenders, are looking to protect their claims after The Weinstein Company, whose former chairman Harvey Weinstein has been accused of sexual misconduct by a number of women, said on Monday it would file for bankruptcy. Harvey Weinstein has denied having non-consensual sex with anyone.

The Weinstein Company is looking for debtor-in-possession financing that will fund its operations during bankruptcy, the sources said. Lenders willing to provide this financing will rank ahead of other creditors when it comes to claims against the company, the sources said. The movie library, in particular, is viewed as the studio’s most valuable asset.

The Weinstein Company’s existing bank group, comprised of 15 banks including MUFG Union Bank NA and Opus Bank, has offered to provide the debtor-in-possession financing to make sure their claims on the film library do not become subordinated to another party, according to the sources.

The Weinstein Company, Opus Bank and Fortress did not immediately return requests for comment. MUFG Union Bank declined to comment.

The Weinstein Company has not yet decided whether to accept the creditors’ proposal, the sources said. It has been speaking to investment firms that have expressed interest in providing the debtor-in-possession financing, including Fortress Investment Group LLC, said the sources, who asked not to be identified because the deliberations are confidential.

Should the Weinstein Company decide to use external financing for its bankruptcy, the existing creditors are prepared to contest this in court, one of the sources said.

The sources cautioned that not all the banks holding loans to the Weinstein Company may choose to participate in the debtor-in-possession financing. A bankruptcy judge must approve the loan.

The Weinstein Company had been close to inking an agreement this month to be taken over by investors led by former Obama administration official Maria Contreras-Sweet for more than $500 million, but a lawsuit filed by New York Attorney General Eric Schneiderman on Feb. 11 complicated the negotiations.

The Weinstein Company is also looking for a so-called stalking horse bidder to make an initial proposal for the company in a court-supervised auction, according to one of the sources.

Reporting by Jessica DiNapoli in New York

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