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Weinstein Company Sale Delayed by N.Y. Attorney General Lawsuit

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Eric T. Schneiderman, New York’s attorney general, speaking to reporters in August. Mr. Schneiderman filed a lawsuit against the Weinstein Company on Sunday and demanded that any victims of Harvey Weinstein be justly compensated. The lawsuit was a last-minute snag during negotiations to sell the company. Credit Drew Angerer/Getty Images

The fire sale of the Weinstein Company hit a last-minute snag on Sunday, when Eric T. Schneiderman, New York’s attorney general, filed a lawsuit against the studio and its fraternal founders alleging that they repeatedly violated state and city laws barring gender discrimination, sexual harassment, sexual abuse and coercion.

The lawsuit, filed electronically in State Supreme Court in Manhattan, appeared timed to at least temporarily stop a sale, which had been expected to be finalized on Sunday.

“Any sale of the Weinstein Company must ensure that victims will be compensated, employees will be protected going forward, and that neither perpetrators nor enablers will be unjustly enriched,” Mr. Schneiderman said in a news release.

The Weinstein Company, which has been trying to avoid bankruptcy since October, when reports by the The New York Times and The New Yorker revealed decades of sexual harassment allegations against one of its founders, Harvey Weinstein, was nearing a deal to sell itself to an investor group for roughly $275 million, plus the assumption of $225 million in debt, according to two people briefed on the deal who spoke on condition of anonymity because the negotiations are private. The impending deal also called for the creation of a multimillion-dollar settlement fund for women who have accused Mr. Weinstein of abuse.

Under the deal, the two people said, Mr. Weinstein’s younger brother, Bob Weinstein, who has run the studio’s commercially oriented Dimension Films label, would leave the studio. Bob Weinstein had frantically tried to keep control of the company following his brother’s firing in October.

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Harvey Weinstein speaking at an event in New York in 2012. Mr. Weinstein has denied all allegations of “non-consensual sex.” Credit Carlo Allegri/Reuters

The brothers, who jointly own about 42 percent of the Weinstein Company, would receive no cash from the proposed sale, according to the two people briefed on the deal. Other equity holders, including the advertising giant WPP Group, may also be wiped out.

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