A bankruptcy court judge on Monday upheld a liquidation plan for the former Weinstein Co., which was filed at Chapter 11 three years ago, because the disgraced magistrate accused Harvey Weinstein in a sea of sexual abuse and harassment.
The man Weinstein is serving a 23-year sentence for rape and assault at a correctional facility in New York State. The assets of his company were sold to a private equity firm, with the proceeds going to insured creditors. A group of uninsured trade creditors and victims of Weinstein argued over how to divide what was left, basically settlement money offered by insurance companies.
After years, a large majority of both agreed to accept the latest iteration of the plan earlier this month, which includes $ 17 million for a sexual misconduct claim fund to be split among the women, and another $ 8.4 million for other bankruptcy claims. It is very unusual to have a bankruptcy case where one class of creditors are victims of sexual abuse and the other dealers.
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“The mess Harvey Weinstein left behind was very difficult to clean up,” Weinstein Co. estate attorney Paul Zumbro said in his opening statement that the agreement was the best compromise to ensure all parties received compensation. .
Four victims of abuse have objected to the arrangement, which requires them to release Harvey Weinstein and former officers and directors of his company, including Brother Bob Weinstein, from all future legal claims. They do have the option to accept a lower payout – 25% of what they are entitled to – and still retain the right to go after Harvey in court, but no one else.
U.S. Judge Mary Walrath, U.S. bankruptcy, noted that ‘83% of Weinstein’s victims have spoken very loudly that they want to be shut down by accepting this plan, and that they are not seeking any further lawsuits. go through to get recovery, a possible compensation for what was done to them, although it is clear that money alone will never give it to them. ‘
“But I can only deal with the financial aspect of this, and the bankruptcy code says that creditors as a class must decide how they want their claims to be treated,” she said, giving her decision at the end of half an hour. hour heard.
About 48 people with sexual misconduct claim to have done ballots, and 39 support the agreement. Four actively objected.
Bob Weinstein, who was co-CEO, was regularly mentioned at the trial. Kevin Mintzer, an attorney for the victims who objected, calls him particularly complicit in his brother’s crimes, but notes that he will be protected by the plan. Cases against Bob Weinstein have been dismissed by trial judges, but not by appellate courts. “If this settlement is approved, no one will ever get a chance to review these cases of Robert Weinstein,” he said. Zumbro calls Bob Weinstein a touchline and an example of the opposition’s ‘tortuous’ argument.
Mintzer also argued that insurers could be pushed further to sweeten the pot if the current plan is scrapped.
Under the plan, Harvey Weinstein defended 100% of the claims of all his legal costs. Other former officers and directors of the company waived 50% of the legal cost claims to which they would technically have been entitled.
“I do not accept that if everyone goes back to the drawing board that there will be additional repair, or significant additional repair,” the judge said. “I accept that the parties negotiated in good faith.”
The lawyers of the objectors also call it unfair that their clients, some of whom are rape victims, have the same claim to the approval of the plan as others who may have suffered only oral abuse.
‘I will not consider whether the claim of one victim is more [valid] ‘s someone else’s – it’s going down the drain, ‘the judge said. ‘If they prefer Mr. “Do not release Weinstein, they have the right to go to a jury trial.”
Debra Grassgreen Advice for Unsecured Creditors‘ The committee (including the victims) said that ‘it is critical to consider that the plan balances the interests of the objectors by giving them their day in court … But it also takes into account the wishes of the rest of the women who voted – those who just want to get on with their lives and the last thing they want is to go through years of public litigation and end up running the risk of getting nothing – they want the obedience stop. They want to find closure. ”
Harvey Weinstein is appealing his conviction in February 2020 in New York and is facing 11 charges in Los Angeles, including rape and sexual battery, pending an extradition that is now in the wheels.