The sale of The Weinstein Company is off, at least for now.
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Talks between TWC and a group of investors led by former Small Business Administration chief Maria Contreras-Sweet broke down after New York Attorney General Eric Schneiderman filed a lawsuit Sunday evening, a source familiar with the negotiations told ABC News.
At this point a sale is looking "unlikely," the source said.
Schneiderman and Contreras-Sweet were supposed to talk Monday about the terms of the deal, which she had not been able to discuss due to a non-disclosure agreement, the source said. The lawsuit made that conversation moot.
Schneiderman filed a lawsuit that named the company, Harvey Weinstein and Bob Weinstein as the deal was about to close in part out of fear alleged victims of Harvey Weinstein's sexual misconduct would not be properly compensated.
"It is critically important that any deal to buy the company's assets ensure first that victims will be adequately compensated, that employees will be protected moving forward and that company executives who perpetuated or enabled the pervasive sexual misconduct at TWC not be rewarded," Schneiderman said.
The investor group had offered to put aside $50 million for victim compensation and re-imagined the company as female-led. Schneiderman disputed that those terms had been assured.
"As of yesterday there was no deal that would have met these standards," Schneiderman said.
He added that he is open to a sale, noting that at this stage he is not seeking a temporary restraining order to block one.
Representatives for The Weinstein Company and Bob Weinstein could not be reached over the weekend to discuss the lawsuit, though Harvey Weinstein's attorney Ben Brafman said that many of the allegations against his client are "without merit."
"While Mr. Weinstein's behavior was not without fault, there certainly was no criminality, and 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 at either Miramax or TWC," Brafman said. "If the purpose of the inquiry is to encourage reform throughout the film industry, Mr. Weinstein will embrace the investigation. If the purpose however is to scapegoat Mr. Weinstein, he will vigorously defend himself."