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A bankruptcy court judge on Monday confirmed a liquidation plan for the former Weinstein Co., which filed Chapter 11 three years ago as disgraced mogul Harvey Weinstein imploded in a sea of abuse accusations sexual and harassment.
Weinstein, the man is serving a 23-year sentence for rape and assault at a correctional facility in upstate New York. The assets of his company have been sold to a private equity firm, the proceeds of which are paid to secured creditors. A group of unsecured commercial creditors and Weinstein victims and their lawyers have argued over how to divide what is left, essentially the settlement money offered by insurance companies.
After years, a large majority of the two agreed to accept the latest proposed settlement earlier this month, which includes $ 17 million for a sexual misconduct claims fund that will be split between women, and 8.4 millions more for other bankruptcy claims.
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“The mess Harvey Weinstein left has been very difficult to clean up,” estate attorney Paul Zumbro said in his opening speech, insisting the deal was the best compromise available to ensure that all parties receive compensation.
Four victims of abuse have opposed the settlement, which would require them to release all future claims against Harvey Weinstein and former executives and directors of his company, including his brother Bob Weinstein. They have the option of taking a lower payment – 25% of what they would be entitled to – and still retain the right to sue Harvey in court, but no one else.
US Bankruptcy Judge Mary Walrath in Delaware noted that “83% of Weinstein’s victims have expressed very loudly that they want the closure by accepting this plan, that they are not looking to have to go through other legal proceedings to obtain a recovery, a possible reward. for what was done to them, although it is clear that money alone will never give them that.
“But I can only deal with the financial aspect and the bankruptcy code says creditors should decide as a class how they want their claims handled,” she said, making her statement. decision after two and a half years. -hearing time.
Some 48 people with allegations of sexual misconduct voted, with 39 supporting the deal. Four actively objected. Bob Weinstein, who had been co-CEO, has spoken a lot. Kevin Mintzer, an attorney for opposing victims, said he was particularly complicit in his brother’s crimes but would be protected by the plan. The cases against Bob Weinstein were brought by trial judges, he noted, but not by courts of appeal. “If this settlement is approved, no one will have a chance to review these Robert Weinstein cases,” he said.
Mintzer also argued that insurers could have been pushed further to soften the pot had the current plan been scrapped.
Under the approved plan, Harvey Weinstein waived claims for coverage for all of his legal defense costs. Other former officers and directors of the company waived 50% of the legal expense claims to which they would technically have been entitled before any other insurance claims were settled.
“I don’t accept that if everyone went back to the drawing board there would be additional recovery, or substantial additional recovery,” the judge said. “I accept that the parties have negotiated in good faith.”
Lawyers for the objectors have also found it unfair that their clients, some of whom are rape victims, have the same status to endorse the plan as others who may have suffered only from verbal abuse.
“I will not go into the question of whether a victim’s claim is [valid] than another – which goes into a rat hole, ”said the judge. “If they choose not to release Mr. Weinstein, they have the right to go to a jury trial.”
Harvey Weinstein is appealing his February 2020 conviction in New York City and faces 11 felony charges in Los Angeles, including rape and sexual assault, pending an extradition which is now pending.
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