U.S. Bankruptcy Court Judge Mary Walrath in the District of Delaware was scheduled to hear a request by the company’s estate to appoint law firm Bernstein Litowitz Berger & Grossmann as special litigation counsel. The new firm would aim to convert the bankruptcy proceeding from Chapter 11 to Chapter 7, another matter to be decided at the hearing. In that scenario, the company would be liquidated and a civil settlement of the claims against it would not be able to go forward.
In requesting more time before the hearing, Paul Heath, an attorney with Richards Layton & Finger who represents the debtors, cited progress in settlement talks.
“I hope, your honor, that we won’t need any of your time on that day,” Heath said of the new July 15 hearing date, during a brief proceeding made available via teleconference. Walrath assented, granting a continuance and reminding all parties in the courtroom, “I’m not going to stand in your way if you’re able to resolve it.”
Settlement negotiations have been a complex undertaking involving the insurance companies backing the officers and directors of TWC, the New York State Attorney General’s Office and the Committee of Unsecured Creditors. The committee represents many of those who have accused Harvey Weinstein of sexual assault, harassment and retaliation, and former officers and directors of enabling his conduct.
The most recent global settlement offer, totaling a reported $44 million, became public last month and complicated the bankruptcy process. The deal would have compensated the many accusers of Harvey Weinstein, but also board members and other equity holders to a degree the accusers felt was improper. Several of the accusers, including actress Ashley Judd, publicly rejected the settlement as inadequate on that basis.
In April, a federal judge dismissed a lawsuit filed by 10 women who accused the officers and directors of the studio of aiding in Weinstein’s alleged sexual misconduct.
While the bankruptcy proceeding lumbers on, Harvey Weinstein still faces multiple criminal charges in a sexual assault trial in New York that is scheduled to begin in September. The onetime mogul has also been investigated by authorities in LA and London after multiple criminal allegations in those cities.
Lantern Entertainment acquired the assets of the Weinstein Co. last year for $289 million. In March of this year, Lantern teamed with former MGM chief Gary Barber to form Spyglass Media Group, which will control the former Weinstein assets.