Weinstein bankruptcy could complicate lawsuits
NEW YORK » A bankruptcy filing by The Weinstein Co. would be the latest episode in the unraveling of a Hollywood powerhouse and have repercussions for any lawsuits filed against the company over of allegations of sexual misconduct by its cofounder, Harvey Weinstein.
Here are some questions and answers about the possible bankruptcy filing and what it means for Weinstein’s accusers: lawsuit two weeks ago that halted the proceedings.
The buyers’ group, led by former U.S. Small Business Administrator Maria Contreras-Sweet, had been in talks with Schneiderman’s office in the hopes of reviving the sale, but the board of the Weinstein Co. pulled the plug Sunday.
In a letter to the buyers, the company said the group had failed to come through with interim funding necessary to keep the company running pending finalization of the sale. The letter also said that the buyers, following a Feb. 21 meeting with the attorney general’s office, imposed other conditions that would delay a closing of the sale for many months, something the company could not afford. The company said an orderly bankruptcy process has become the only viable option.
In a statement Monday, Contreras-Sweet said she was surprised by the Weinstein Co.’s decision and that it has been her “understanding that we were close to signing the transaction documents in a couple of days.” million for the fund, which would have been overseen by an independent administrator. Now, if the bankruptcy filing proceeds, the accusers will be left with the insurance money and whatever is left after creditors are paid.
The Chapter 11 filing, however, would not stop the lawsuit filed by Schneiderman’s office. It also would not prevent the civil lawsuits from going forward against other named individuals and entities.
Both Weinstein brothers — Harvey and Bob — are named in the class action suit and in the attorney general’s lawsuit.
The lawsuit filed by Weinstein’s former assistant, Sandeep Rehal, also names the Weinstein brothers, along with the company’s former head of human resources.
“A bankruptcy filing, should it occur, has no actual impact on the claims against the other individual defendants,” said Genie Harrison, an attorney for Rehal. “It complicates the process but I have confidence that the matter is going to unwind itself appropriately.”
Lawyers for the plaintiffs involved in the class action suit have argued that a bankruptcy filing would bring transparency by opening the company’s finances to scrutiny.
John Woodman, a corporate law attorney who is not involved in the cases against the Weinstein Co., said bankruptcy proceedings would give the plaintiffs the right to question the company about its assets. It also could allow the plaintiffs to weigh in on any future sale, though that could be complicated by the fact their claims against the company are disputed.