FILE – In this February 5, 2020 file photo, Harvey Weinstein exits a Manhattan courthouse during his rape trial in New York. The Weinstein Co. attorneys presented a revised bankruptcy plan to a judge in Delaware on Wednesday, September 2, 2020, that would provide approximately $ 35 million to creditors, including victims of sexual misconduct by vicious film mogul Harvey Weinstein. (AP Photo / John Minchillo, File)
DOVER, Del. – Attorneys for The Weinstein Co. presented a revised bankruptcy plan to a Delaware judge Wednesday that would provide approximately $ 35 million to creditors, including victims of sexual misconduct by vicious film mogul Harvey Weinstein.
The settlement amount is $ 11.5 million less than an earlier plan that was scrapped after a federal judge in New York declined to approve a proposed $ 19 million settlement between Weinstein and some of his accusers. The settlement of the alleged class action lawsuit was an integral part of the original bankruptcy plan.
Company lawyers told Judge Mary Walrath that the reduction was primarily due to the fact that the plan no longer includes contributions from insurers to resolve certain “Miramax-era” claims that arose before Harvey Weinstein did Left the company and founded the Weinstein Co.
About half of the total billing amount, about $ 17 million, will go to a single sexual misconduct claims fund, compared to about $ 25.7 million for three different categories of sexual misconduct claims under the previous plan . An additional $ 8.4 million of the settlement amount would go to a liquidation fund to resolve non-sexual misconduct claims and $ 9.7 million would be used to reimburse defense costs for corporate officials other than Weinstein.
The company's attorneys have made it clear that if sexual misconduct claim holders vote to reject it, they will not ask Judge Walrath to approve the plan.
"We will not try to narrow the plan for the survivors," said attorney Paul Zumbro.
Meanwhile, lawyers for The Weinstein Co. asked Walrath to give Walrath an October 15 deadline for filing sexual misconduct claims and a method of notifying potential claimants through online postings and publications such as The Hollywood Reporter, Variety and The New York Post to approve.
Walrath said that if attorneys could agree on a language that would clarify the ramifications for future litigation for victims filing for bankruptcy, they would allow the company to send the notices.
"I agree with the debtor that this should go forward and this could, if not all of the claims, resolve a large percentage of it," she said.
Zumbro said the revised plan will provide greater relief to sexual misconduct claim holders because the proposed class of claims is smaller than the original plan and no money would be used on class action counsel fees.
He also noted that Harvey Weinstein would no longer receive any reimbursement of his defense costs or any other distribution under the revised plan.
Zumbro noted that the New York judge had described the possible payments to Weinstein as "disgusting".
"The debtors and the other parties to the settlement heard this loud and clear," he said.
Under the new Chapter 11 liquidation proposal, holders of sexual misconduct claims would receive 100% of the liquidation value of their claims if they agreed to indemnify Weinstein from all legal claims. A claimant who chooses not to release Weinstein but to keep the option to sue him in another court would receive 25% of the value of her bankruptcy petition. The other 75% would be allocated to a "reversal fund" for the benefit of insurance companies that could be at stake in future claims payments litigation.
Contrary to normal bankruptcy procedures, sexual misconduct claim holders would not be asked to vote on the plan until everyone knows the value of their claim.
Robert Feinstein, lawyer for the company's official committee of unsecured creditors, said the committee unanimously supported the proposed settlement, as did many other individual petitioners.
"We hope it will be openly received … and that people will keep their fire in the press and in the courtroom until they have all the facts and we can have a mature conversation about what is going on," Feinstein said referring to attorneys for three resident plaintiffs in the New York case. These lawyers have called the latest proposal a "total and utter sell-out" of Weinstein's victims.
Attorneys acting on behalf of two of these women previously asked Walrath to convert the Chapter 11 case into a Chapter 7 liquidation. This would reduce the amount of money that goes to professionals and allow a trustee to bring civil claims on behalf of the bankruptcy estate against Weinstein and other company officials, they argue.
But Elizabeth Fegan, an attorney who represents several women in the New York case, including lead plaintiff Louisette Geiss, told Walrath on Wednesday that nearly two dozen women are supporting the revised bankruptcy plan.
"I think it's important that your votes are not outweighed by two women who don't approve of the plan," she said.
The Weinstein Co. filed for bankruptcy protection in March 2018 amid a sexual misconduct scandal that toppled Weinstein and sparked a nationwide movement to crack down on predatory sexual behavior and workplace harassment. Weinstein was sentenced to 23 years in prison earlier this year after being convicted of rape and sexual assault in New York.
The Los Angeles district attorney is filing for extradition to California on charges of rape and sexual assault against another woman in 2013.