New York's top state prosecutor sought to impose conditions Monday on investors seeking to buy The Weinstein Company, saying executives who facilitated years of abusive behavior by Harvey Weinstein could not be allowed to remain at the film studio.
An investor group led by former Obama administration official and businesswoman Maria Contreras-Sweet was poised to close a deal to buy The Weinstein Company for a reported $500 million, before New York suddenly filed the lawsuit on Sunday.
But state attorney general Eric Schneiderman said any deal should embody three principles: adequate compensation for victims, protection for employees and the removal of those people who were complicit in Weinstein's misconduct for 12 years.
"They knew what was happening. It was flagrant. It was flamboyant. They knew how pervasive it was and not only did they fail to stop it, they enabled it and covered it up," Schneiderman said.
It was the latest twist in the controversy that ignited in October when allegations of sexual harassment, assault and rape first surfaced against Weinstein, the producer of several Oscar-winning films.
The film mogul's career was shattered by the claims, now made by more than 100 women and spanning several decades, and the subsequent nationwide reckoning about harassment and abuse has ended the careers of a litany of powerful men.
Schneiderman complained that the deal as originally drawn up would have shielded top executives who covered up Weinstein's abuse, muzzled his victims with non-disclosure agreements and would not have compensated any of the victims.
"A deal that essentially removes the two Weinstein brothers but leaves the rest of management intact, we think, should be unacceptable," he said, singling out chief operating officer David Glasser, whom he said had been expected to be named CEO.
A compensation fund outlined in the deal would have been dedicated to legal fees and other expenses, not the women themselves, Schneiderman told a news conference.
"If any prospective buyers are truly interested in turning the page and doing right by TWC's employees who were abused for years... they can and will fix these problems with the deal," he said.
"We have never seen anything as despicable as what we have seen here," he added, in reference to misconduct at the company from 2005 to 2017.
If a sale were finalized that did not meet the three principles, his office could potentially request a temporary restraining order.
"If I were trying to purchase the assets of the company, I would want to negotiate a settlement of this complaint as a part of the deal," Schneiderman said.
- 'Very fluid' -
The Wall Street Journal said the deal fell apart because the lawsuit introduced too much uncertainty and that the company would now likely enter bankruptcy reorganization.
But a source close to the talks insisted to AFP that negotiations were still on, despite the "new perspective" created by Schneiderman's comments.
Discussions are "very fluid," the source said.
"I hope that this deal does not go away for these people's jobs because then there will be nobody monitoring anything," Weinstein's brother Bob -- the current head of the company -- was quoted as saying by the Journal.
Harvey Weinstein, 65, is being investigated by British and US police, but has not been charged with any crime.
He denies having non-consensual sex and is reportedly in treatment for sex addiction.
The New York lawsuit alleges that female assistants were required to facilitate Weinstein's sex life as a condition of employment and clean up after his sexual encounters, even going so far as returning items of clothing left behind.
Prosecutors said Weinstein made verbal threats to "kill" several staff or their families, that assistants were taught "how to dress and smell more attractive" and that his drivers were required to keep condoms and erectile dysfunction injections in the car.
"While Mr Weinstein's behavior was not without fault, there certainly was no criminality," his lawyer Ben Brafman, one of America's most celebrated criminal defense attorneys, has hit back in response.
"At the end of the inquiry, it will be clear that Harvey Weinstein promoted more women to key executive positions than any other industry leader and there was zero discrimination."