New York Attorney General Eric Schneiderman has filed a lawsuit against Harvey Weinstein, his brother Robert and their firm, the Weinstein Company, a move that could complicate the sale of the disgraced mogul's film studio, the media reported.
Schneiderman said on Sunday that a four-month investigation into sexual harassment found "vicious and exploitative mistreatment of company employees", reports CNN.
The lawsuit, filed electronically in the State Supreme Court in Manhattan, cites what it calls "egregious" violations of state, civil and human rights laws.
Harvey and Robert Weinstein co-founded the company in March 2005. Previously deemed as one of Hollywood's most powerful film studios, it has produced Hollywood blockbusters like "Django Unchained", "The King's Speech", "Silver Linings Playbook" and "Inglourious Basterds".
The complaint alleges "a years-long gender-based hostile work environment, a pattern of quid pro-quo sexual harassment, and routine misuse of corporate resources for unlawful ends".
The alleged misconduct began in 2005 and continued through October 2017, the suit has claimed.
The lawsuit has also delayed a fire sale of the company, which was expected to be finalised on Sunday, reports The New York Times.
"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," Schneiderman said.
The company has been trying to avoid bankruptcy since reports of the allegations were first revealed by The New York Times and The New Yorker magazine.
Before the lawsuit, the company was nearing a deal to sell itself to an investor group for about $275 million, plus the assumption of $225 million in debt, informed officials told The New York Times.
Robert had frantically tried to keep control of the company following his brother's firing in October.
The brothers, who jointly own about 42 per cent of the company, would receive no cash from the proposed sale, according to the officials.
Other equity holders, including the advertising giant WPP Group, may also be wiped out.
In reply to the lawsuit, Weinstein attorney Benjamin Brafman said in a statement that "a fair investigation by Schneiderman will demonstrate that many of the allegations against Harvey Weinstein are without merit", CNN reported.
"While Mr. (Harvey) Weinstein's behaviour was not without fault, there certainly was no criminality," the statement added.