Thursday, May 03, 2018

How bankruptcy law could keep money — and the truth — from Weinstein’s victims

On Monday, New York Attorney General Eric Schneiderman wrote an open letter urging anyone who might bid on the Weinstein Co., the now-bankrupt studio founded by Harvey Weinstein, to include money to compensate the Hollywood mogul’s accusers. On Tuesday, a proposal surfaced that would do just that, from Broadway producer Howard Kagan.

But by Tuesday afternoon, the Weinstein Co. had rejected that proposal and announced that its preferred buyer, a Texas private-equity company with no experience in the entertainment industry, was the only entity it would allow to bid for its valuable film library and other assets.

Which means the 80-plus women (and at least one man) who say Weinstein assaulted or abused them are likely to find that there’s little or no money left on the company’s books to compensate them by the time the bankruptcy process is finished. I studied rapid bankruptcy sales, like the kind the Weinstein Co. is using, while on a fellowship at Harvard. They can be a taxpayer-supported path for companies to arrange insider sales while ditching corporate responsibilities — to workers, to the environment and, as in the Weinstein case, to alleged victims of corporate misbehavior and sexual abuse. The set-up also could make it harder for law enforcement to determine who facilitated Weinstein’s predations.

Until now, from the outside, the Weinstein Co. bankruptcy looked fair. On the same day the company filed for bankruptcy in March , it publicly released employees who say they were victims of or witnesses to Weinstein’s actions from nondisclosure agreements they’d been pressured to sign. And it gave two of the women who accused him of wrongdoing a seat at the table for the bankruptcy negotiations. At the time, Bob Weinstein, Harvey’s brother and the studio’s co-founder, said the company was pleased to have a plan for “pursuing justice for any victims.”

But in bankruptcy, as in the movies, appearances can be misleading.

Read the rest here.

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