Colony Capital will not be providing an emergency cash infusion to the Weinstein Company, as billionaire Tom Barrack’s private equity firm has decided to back away from a preliminary agreement to invest in and potentially acquire the company, the New York Times reported Wednesday.
Last Monday, Colony announced that it had agreed to fund an “immediate capital infusion” into the company, which was fighting for survival after dozens of accusers alleged sexual harassment and assault against TWC co-founder and CEO Harvey Weinstein. As part of that agreement, Colony was given an exclusive negotiating period to place a bid for all or part of the company or its assets.
However, as more accusers emerged — and one sued the company — Barrack apparently had a change of heart about the value of the asset he was considering acquiring. In a Bloomberg TV interview Wednesday, Barrack called TWC “a patient that’s dying on the table.”
Lloyd Greif, the president and CEO of investment bank Greif & Co., told TheWrap that Colony’s pullout almost assures that TWC will go into bankruptcy of some kind.
“There’s going to be a transaction here,” Greif said. “It’s going to be through a bankruptcy. It’s underwater through the secured debt, let alone the unsecured debt and the litigation. The only way you get this thing done is through a bankruptcy to cleanse the asset.”
A Colony representative did not immediately respond to TheWrap’s request for comment.