The New York lawsuit alleges that female assistants were required to facilitate Weinstein's sex life as a condition of employment and clean up after his sexual encounters, even going so far as returning items of clothing left behind.
The deal also would have kept non-disclosure agreements in place that have been keeping Weinstein's accusers from speaking publicly about his alleged misconduct, Schneiderman said.
The company's board of directors issued a response to the Wall St.
More than 70 women have accused Weinstein of sexual harassment and sexual assault in incidents that go back decades. He has denied any non-consensual activity.
"The board's whole objective here was to try to keep this a going concern, save jobs - there's over 100 people's jobs at stake-and we were taking no equity", Mr Bob Weinstein was quoted as saying by The Journal.
Under the deal, Maria Contreras-Sweet has publicly said it would compensate the victims of alleged abuse by Weinstein. The studio distributed many successful films, including The King's Speech, The Iron Lady, Inglourious Basterds, and Django Unchained.
The deal was said to be finalised on Sunday.
He also said a "fair investigation" by the AG would "demonstrate that numerous allegations against Harvey Weinstein are without merit", and he added if his client was made a "scapegoat" he would "vigorously defend himself".
"While they had different titles, as a practical matter their primary responsibility included taking [Weinstein] to parties at which he could meet young women, and introducing him to young women seeking opportunities at [The Weinstein Company] with whom he could attempt to engage in sexual relations", the lawsuit says. Los Angeles Police Department and New York Police Department have already launched probes against Weinstein.
"A deal that essentially removes the two Weinstein brothers but leaves the rest of management intact, we think, should be unacceptable", he said, singling out chief operating officer David Glasser, whom he said had been expected to be named CEO.
The suit comes at a critical time for The Weinstein Company. She pitched the creation of a women-led company with a new name and an inclusive mandate. "When she attempted to place bags or other barriers between them to make it harder for him to reach her, he moved the barriers or repositioned himself so that the unwelcome sexual contact could continue".
The attorney general said the Weinstein Xompany has repeatedly turned a blind eye to its co-founder's sexual misconduct. "I don't know the number of complaints, but there were certainly dozens of formal complaints and many more informal complaints over the years".
At this point a sale is looking "unlikely", the source said. He said that Harvey Weinstein's personal filed had "gone missing".