Don’t expect details of The Weinstein Company’s past financial dealings to come tumbling out of court filings in the ongoing fraud suit against the indie studio for the handling of its majority owned, and now bankrupt, Genius Products video unit. At least, not without some scrutiny by a judge. Last Wednesday, parties to the suit — which challenges about $130 million in transactions between the parent and the video operation — agreed to a protective order that may permit Weinstein to submit some, though not all, requested internal business documents under seal, if the court sees the need to keep information confidential.
The current litigation was filed in 2015 by Alfred H. Siegel, the trustee in a Chapter 7 involuntary bankruptcy filed by Genius creditors. The underlying bankruptcy is still unresolved, because Siegel is claiming that Weinstein, through self-dealing, raided Genius of some yet-to-be determined portion of the $130 million in internal transactions at a time when it owned 70% of the video distributor.
In an unusual twist, the balance of Genius was owned by Genius Products Inc., whose chairman was Stephen K. Bannon—now in charge of Donald Trump’s presidential campaign. So Bob and Harvey Weinstein, staunch supporters of Democratic candidates including Hillary Clinton, were deep in business with Bannon, now allied with Trump.
Bannon is not named as a defendant in the current suit, which is in the federal bankruptcy court for the Central District of California in Los Angeles. And The Weinstein Company has strenuously contested the fraud claim, which was left standing when bankruptcy judge Richard M. Neiter tossed several related claims last October.
But the suit, with its demands for information about Weinstein’s internal dealings, remains a problem for the company, as it wrestles with an even bigger challenge: How to satisfy backers who would like to see a cash return on their long-term investment in the company.
A next hearing in the lawsuit had been set for next week, but was recently continued until November 1. A lawyer for Siegel declined to discuss the case Monday, and queries to both Weinstein and its legal team drew no response.