Two weeks after a federal judge decimated a proposed $19 million class action settlement for victims of the currently incarcerated Harvey Weinstein, lawyers for several women involved want the New York Attorney General to put the brakes on an emerging sleight of hand legal move.
“It appears that Harvey and Robert Weinstein, their insurers and corporate enablers are so desperate to secure the deal that Judge Hellerstein immediately rejected as “obnoxious” that they are now going to ask the bankruptcy court to approve what Judge Hellerstein would not,” said Douglas Wignor and Kevin Mintzer after a filing in Bankruptcy court on Tuesday by the estate of the Weinstein Co.
“This conduct is downright offensive and the New York Attorney General should immediately make it clear that she will refuse to endorse this end-around scheme,” the long objecting counsel for Wedil David, Dominique Huett, Kaja Sokola, Rowena Chiu, Zelda Perkins, and Tarale Wulff added to the office of the Empire State’s Letitia James.
Having previously said “we will review the decision and determine next steps” when the proposed agreement was deep-sixed on July 14, the NY AG’s office did not respond to request for comment on the latest developments this afternoon by Deadline.
After years of often challenged negotiations on a global settlement looked to be in its end game, Judge Alvin Hellerstein in mid-July unequivocally rejected approval of the AG James endorsed deal. Estimated to have ended up being around $20,000 per victim when all the math was done and paid for by TWC insurance, the overall $47 million agreement would have seen the Weinsteins and their well heeled ex-board members haul in more than $15 million for their legal defense in the end. That was a rich man’s reality that many including Judge Hellerstein found “unconscionable” as he expressed doubt in the actual class action status itself and told lawyers to litigate individually.
Last week, Wignor LLP filed a motion for David and Huett in U.S. Bankruptcy Court in the Diamond State advocating for the Chapter 11 bankruptcy cases to be converted to Chapter 7. That shift would effectively end settlement discussions and liquidate the Weinstein estate, a step that attorneys say is overdue.
Hold on there, said the Weinsteins side.
Seeking to change an important August 4 hearing date that could have seen the matter converted from Chapter 11 to that Chapter 7 status, today’s filing in Delaware by a phalanx of lawyers for the debtors, incorporated and not, sought to sidestep the need for such judicial sign-off by basically re-designating the terms of the deal. The result would be a new classification and rejigging the victims’ compensation to about $24 million (before legal fees).
“The failure to obtain preliminary approval of the Class Action Settlement Agreement was a major disappointment and significant setback for the Debtors and their estates but the Debtors, the Committee, and the other Settlement Parties quickly pivoted to work on a revised settlement framework in light of the District Court’s ruling that would accomplish the entirety of the settlement through a revised plan (“Revised Plan”) to be confirmed in the Bankruptcy Court,” said teams from the firms of Richards, Layton & Finger, P.A, Cravath, Swaine & Moore LLP and Pachulski Stang Ziehl & Jones LLP (READ IT HERE).
“The revised framework provides that, in lieu of class action treatment of the sexual misconduct claims, such claims will be placed into a single class in a chapter 11 plan of liquidation and administered in much the same way that many other mass tort cases are handled in bankruptcy cases – without the need for a certified class in a class action lawsuit,” the 13-page document continues …AKA give us until August 31 to get this done for our clients.
Harvey Weinstein’s attorney on Tuesday wanted to see the brakes put on those who want to put the brakes on a new-ish version of the deal.
“While there are those who continue to rail against the settlement, the practical reality is that outside the settlement the plaintiffs face an uncertain financial recovery, with The Weinstein Company bankrupt, and Mr. Weinstein incarcerated and defending legal matters, facing debt and judgments, frozen assets, and a line of creditors looking for compensation,” Imran H. Ansari told Deadline.
“Mr. Weinstein’s current and future financial state is far from healthy, not only has his personal liberty been taken from him, but his financial liberty as well,” the Aidala, Bertuna & Kamins, P.C. lawyer added. “Those yelling loudly seem to ignore that many parties want this settlement to succeed, importantly, it is not just the Weinstein defendants, but the plaintiffs themselves, who likely recognize that it is the route to a realistic recovery.”
After a trial that lasted almost two months, on February 24, Weinstein was found guilty by a New York jury of two sex crime felony charges. Allegedly suffering from a litany of health issues that saw him in and out of Bellevue Hospital, Weinstein was sentenced to 23 years behind bars on March 11.
Facing a COVID-19 pandemic delayed extradition to L.A. on a series of rape and sex-crime charges, such as an April 10th added sexual battery by restraint charge, the one-time coronavirus infected Pulp Fiction EP is presently out of isolation and serving his time at the maximum security Wende Correctional Facility near Buffalo. Since his bout with the illness, the 68-year old Weinstein has also been accused of raping a 17-year old in 1994 in a May 29 jury trial-seeking suit.
Accused by Ashley Judd in a still temporarily halted case, failing to get a sex-trafficking class action tossed out, and the subject of a more recent lawsuit from a woman who says he abused her when she was 16 in 2002, Weinstein is also facing allegations from close to 100 other women who say he sexually assaulted or sexually harassed them.