Nearly three years after the Weinstein Co. filed for bankruptcy, a judge on Monday upheld a liquidation plan that would provide a $ 17.1 million fund for Harvey Weinstein’s sexual misconduct defendants.
The plan also provides $ 9.7 million to former officers and directors of the Weinstein Co., enabling them to pay a portion of their legal bills over the past few years. The directors and officers – including the brother of Weinstein, Bob, as well as James Dolan, Tarak Ben Ammar and Lance Maerov – have also received exemptions that release them from any possible liability to make Weinstein’s actions possible.
U.S. Judge Mary Walrath, bankrupt, approved the plan after a trial in Delaware and said that without the settlement, Weinstein’s defendants would “get minimal, if any, recovery.”
The liquidation plan includes a controversial and protracted legal battle over the remains of Weinstein’s independent studio. The company collapsed late following the release of dozens of allegations of rape, sexual assault, harassment and other misconduct.
Several insurance companies will pay out a total of $ 35.2 million to settle all the remaining claims, including the claims of the Weinstein Co. trade creditors.
The $ 17 million fund will be distributed among more than 50 claimants, with the most serious allegations resulting in payouts of $ 500,000 or more. The settlement was voted among Weinstein’s defendants, with 39 voting in favor and eight against.
Ruby Liu, a lawyer representing the objectors, argued on Monday that the settlement fund was ‘small’ and that the deal deprived her clients of the chance to prosecute Bob Weinstein and other directors in court.
“There are more than monetary considerations that my clients want,” she said. “They are looking for a finding from a jury that holds all responsible parties accountable. It’s not just Harvey Weinstein.”
Paul Zumbro, a lawyer representing the Weinstein Co. estate, argued that the deal was the best available to the defendants. Without releasing the directors and officers, the insurance companies would not have been willing to pay out.
Several attorneys who supported the plan argued that it was better to give the majority of the plaintiffs ‘closure’, rather than forcing all the plaintiffs to endure years of legal action for an uncertain outcome.
“This is the best we’re going to do,” said Debra Grassgreen, an attorney for the unsecured creditors’ committee.
An earlier version of the settlement would have provided a payout of $ 24.3 million to defendants, including women who claimed to have been abused in the ‘Miramax’ era, which went before 2005. Defendants from the Miramax era were not viable. The settlement was later revised to exclude Miramax, Disney and their insurers.
A portion of the payout of the defense costs was initially earmarked for Harvey Weinstein’s defense. The financing was stripped of the plan. The civil plaintiffs still have the option to prosecute Harvey Weinstein in civil court, although most of the attorneys involved believe he has few assets that can be recovered.
The majority of Weinstein’s Co. assets were sold in 2018 for $ 289 million to Lantern Capital, a private equity firm in Dallas. These funds were used to pay the insurer’s creditors.