If the Weinstein Co. follows through on its plan to declare bankruptcy, it would be a costly and painful process that would leave banks, investors, creditors, and sexual harassment victims scrambling to get paid.
The company announced Sunday that it was preparing the paperwork to file for bankruptcy, following the collapse of negotiations to sell the company to an investor group backed by billionaire Ron Burkle. Though the talks may well resume, the company is in an extremely precarious financial position.
Rutan Bankruptcy Partner Roger Friedman is skeptical that there will be enough money to pay all of the creditors and victims.
“The amount of claims will likely exceed the amount the company gets for its assets,” he said. “The amount recovered may be insufficient to cover all the claims.”
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