10:31am PT by Eriq Gardner
Weinstein Co. Faces Lawsuit Over $45 Million Loan
Financial pressures on The Weinstein Co. keep mounting in the wake of a sexual misconduct scandal swirling around Harvey Weinstein. The latest is a lawsuit from AI International Holdings, which claims in New York Supreme Court that a $45 million loan is now in default and that repayment must be made immediately.
AI International, a division of Len Blavatnik's Access Industries, reports being issued a promissory note in September 2016, with a section that provided for default upon "the occurrence of a Material Adverse Change."
The lender is now pointing to recent events — allegations of sexual harassment and rape, Weinstein's termination, an exodus of business partners, board members and creative partners, etc. — as a trigger.
"Weinstein’s termination and the facts and circumstances leading to and surrounding that dismissal ... constitute a Material Adverse Change as defined in the Note," states the complaint.
AI International says it told TWC it was in default on Oct. 10, and that since then, the borrower has twice failed to pay interest payments due. TWC also has allegedly withheld information being demanded by AI.
Now suing for breach of contract, AI wants the full principal amount, unpaid interest, attorney's fees and expenses and further relief. Weinstein is named as a co-defendant. The plaintiff is represented by Richard Werder at Quinn Emanuel.
The Weinstein Co. has hired law firms to explore restructuring, but insiders at the company have resisted the notion that any bankruptcy is imminent. That may depend on whether the company can sell off assets to raise needed cash.