The Weinstein Company, which was co-founded by disgraced Hollywood producer Harvey Weinstein and his brother Bob in 2005, has announced that it will declare bankruptcy after a sale worth $500m fell through.

The sale collapsed after the bidding group refused to provide the cash required to keep the company afloat, as stated in a letter sent by the company's board of directors to the investors leading the group.

"Based on the events of the past week, however, we must conclude that your plan to buy this company was illusory and would only leave this Company hobbling toward its demise to the detriment of all constituents," the letter reads.

"Despite your previous statements, it is simply impossible to avoid the conclusion that you have no intention to sign an agreement – much less to close one – and no desire to save valuable assets and jobs."

The company has been in a dire state since Harvey Weinstein was accused last year by more than 80 women of a string of crimes including sexual harassment, abuse and rape.

Following the high-profile story that shook Hollywood to its core, Weinstein announced he'd be taking an indefinite leave of absence from the company. Four of the company's nine board members also resigned.

Having first started exploring a sale in October after the scandal broke, a deal neared completion two weeks ago, before New York Attorney General Eric Schneiderman filed a lawsuit accusing the company of enabling Weinstein's alleged abuses and objected to the planned sale.

Weinstein has been accused by more than 80 women of incidents over a period of around 30 years. The 65-year-old apologised for behaviour that "caused a lot of pain", but has denied any accusations of rape.

He has since been expelled from numerous Hollywood institutions, including the Academy of Motion Picture Arts and Sciences, who run the Oscars, and briefly entered rehab for "sex addiction".

The initial allegations were reported by The New York Times and New Yorker, leading to many more being made public, and many more being levelled at other industry figures, including Kevin Spacey, Brett Ratner and Louis C.K.

The Weinstein Company is best known for helping bring Oscar-contenders Django Unchained, The King's Speech, Inglourious Basterds and The Imitation Game to the big screen.