“I’m going to deny this motion,” said Chief Judge Sheri Bluebond of the U.S. Bankruptcy Court for the Central District of California in Los Angeles, as she rejected the latest effort by The Weinstein Company to end a high-stakes fraud lawsuit over its dealings with the bankrupt video company Genius Products.
Weinstein once owned most of Genius, through which it distributed home entertainment products, including its own films. But the unit collapsed into bankruptcy, and its bankruptcy trustee, Alfred H. Siegel, later sued Weinstein, claiming it had made about $130 million in fraudulent transfers during the relationship.
At a Tuesday hearing in Los Angeles, Weinstein lawyers including Alan R. Friedman argued that the case should be dismissed because the contract under which the challenged payments were made took effect in 2006, outside the applicable statute of limitations. The trustee, whose lawyers include David Shemano, have maintained that at least a portion of the $130 million was fraudulently transferred and should be paid to creditors.
After listening to, and sometimes joining, a long legal argument on Thursday, Bluebond said she wasn’t ready to buy the Weinstein argument without exploring the underlying transactions. “That sounds good, but I’m not prepared to get there yet,” the judge said. Weinstein lawyers persisted, but Bluebond made her point again — several times, actually. “I’m not saying it isn’t that way,” she said of the Weinstein position. “I’m just saying I’m not there yet.”
Siegel’s legal team noted that Weinstein had yet to deliver documents demanded in the discovery process. All sides agreed with Bluebond that a stab at mediation was in order. But not quite yet. Discovery continues, and a status conference was set for February 7 at 2 PM.