A bankruptcy court judge on Monday confirmed a liquidation plan for the former Weinstein Co., which filed for Chapter 11 three years ago, when tycoon Harvey Weinstein imploded a sea of sexual abuse and harassment charges.
Weinstein, the man is serving a 23-year sentence for rape and assault in a New York state penitentiary. His company’s assets were sold to a private equity firm, with the proceeds going to secured creditors. A group of unsecured commercial creditors and victims of Weinstein and his lawyers have been discussing how to split up what’s left, basically settlement money offered by insurance companies.
After years, the vast majority of both agreed to accept the latest settlement proposal earlier this month, which includes $ 17 million for a sexual misconduct fund that will be split between women, and another $ 8, 4 million for other bankruptcy claims.
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“The mess that Harvey Weinstein left behind was very difficult to clean up,” estate attorney Paul Zumbro said in his opening statement, insisting that the deal was the best deal available to ensure that all parties received some compensation.
Four victims of abuse opposed the deal, which would require them to release all future claims against Harvey Weinstein and his company’s former executives and directors, including Brother Bob Weinstein. They have the option of accepting a lower payment – 25% of what they would be entitled to – and still retain the right to pursue Harvey in court, but no one else.
United States bankruptcy judge Mary Walrath in Delaware noted that “83% of Weinstein’s victims expressed out loud that they want closure through the acceptance of this plan, that they do not seek to have to go through any process to receive any recovery, some possible reward for what has been done to them, although it is clear that money alone will never give them that. ”
“But I can only deal with the financial aspect of that and the bankruptcy code says that creditors must decide as a class how they want their claims to be treated,” she said, making her decision at the end of a two and a half year period. -hearing hours.
About 48 people with allegations of sexual misconduct voted, with 39 supporting the agreement. Four actively objected. Bob Weinstein, who had been co-CEO, showed up a lot. Kevin Mintzer, the victims’ lawyer, said he was particularly complicit in his brother’s crimes, but would be protected by the plan. The cases against Bob Weinstein were tried by judges, he noted, but not by appellate courts. “If this agreement is approved, no one will have a chance to review these Robert Weinstein cases,” he said.
Mintzer also argued that insurers could have been pressured further to sweeten the pot had the current plan been canceled.
According to the approved plan, Harvey Weinstein waived coverage claims for all of its legal defense costs. Other former executives and directors of the company have waived 50% of claims for legal fees to which they would technically be entitled before any other insurance claims are paid.
“I do not accept that if everyone went back to the drawing board, there would be additional recovery or substantial additional recovery,” said the judge. “I accept that the parties negotiated in good faith.”
Opponents’ lawyers also found it unfair that their clients, some of whom were victims of rape, had the same position in approving the plan as others who could have suffered only verbal abuse.
“I will not discuss whether a victim’s complaint is more [valid] than that of another – this is falling into a mouse hole, ”said the judge. “If they chose not to release Mr. Weinstein, they have a right to go to a jury trial.”
Harvey Weinstein is appealing his February 2020 conviction in New York and faces 11 criminal charges in Los Angeles, including for rape and sexual assault, pending an extradition that is now on hold.