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Colony Capital has pulled out of talks to acquire Weinstein Co., source says

Ryan Faughnder, Los Angeles Times on

Published in Entertainment News

LOS ANGELES -- Colony Capital is no longer interested in buying Weinstein Co., the mini-studio co-founded by disgraced movie mogul Harvey Weinstein, according to a person close to the deal talks.

Weinstein Co. and Colony Capital did not have an immediate comment Tuesday.

The company behind "The King's Speech" and "Django Unchained" has been reeling from the scandal that has continued to widen since Harvey Weinstein, formerly its co-chairman, was accused last month of sexual harassment and assault by multiple women. He was fired Oct. 8.

Colony said in mid-October that it would provide Weinstein Co. with a cash infusion to stabilize its operations as it explored an acquisition of all or part of the studio during an exclusive negotiation period.

But soon after, there were clear signs the deal was faltering. Colony pulled out of the agreement to provide rescue financing, and founder Thomas Barrack compared the struggling studio to a dying patient. Barrack told Bloomberg TV that no one wants a deal that would benefit Harvey Weinstein, who still owns 23 percent of the company.

Weinstein Co. is now trying to line up $20 million to $40 million in capital to stay afloat as it explores options, said the person close to the matter, who asked not to be named because the talks are supposed to be private. The company plans to use its film library as collateral against such a loan.

New York equity fund manager Fortress Investment Group had been in talks to provide $35 million in capital to the company, but no deal has materialized.

Meanwhile, the sexual misconduct scandal has continued to spread, with criminal investigations into Weinstein's behavior and lawsuits against his company, including a growing legal battle between the firm and its ousted co-chairman.

ABC News first reported that Colony had ended takeover talks.

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