The impending bankruptcy filing of The Weinstein Company will likely add a major twist to the on-going lawsuits against the company, many of which relate to the alleged sexual misconduct of Harvey Weinstein.
The firm, which produced films such as The King’s Speech and Tulip Fever, revealed late Sunday that it would file for bankruptcy. If it follows through, it will probably have to be removed as a co-defendant in the suits where it is named.
The Weinstein Company fired Weinstein, who co-founded it, after the allegations against the movie mogul emerged in October last year. However, several of the suits resulting from Weinstein’s alleged conduct have since targeted the company, as well as him.
A class action filed in December by actresses such as Louisette Geiss and Katherine Kendall claims that the production company and others enabled Weinstein’s predatory behavior. The company filed a motion to dismiss the suit last week, arguing that Weinstein alone was responsible.
Weinstein’s former personal assistant, Sandeep Rehal, also named The Weinstein Company as a co-defendant when she sued last December, alleging that she had been forced to facilitate his sexual behavior and had herself been a victim of his harassment.
British actress Kadian Noble, who claims that Weinstein assaulted her in Cannes, France, also sued the company along with Weinstein, back in November.
And then there’s the lawsuit from husband-and-wife production team Scott Lambert and Alexandra Milchan, who sued The Weinstein Company over the collapse of a planned Amazon series, which was supposed to be produced by the firm but was scrapped after the scandal broke—the pair said the company must have known the scandal was coming.
And just a few days ago, the Swiss chocolatier Lindt and Sprungli sued The Weinstein Company for $133,333, over the cancellation of a Weinstein Golden Globes party for which it had already shelled out sponsorship money.
All these plaintiffs now face a problem, in part, brought about by yet another lawsuit.
The Weinstein Company is out of cash, and it had been hoping to sell itself for $500 million in order to stay afloat. But then, earlier this month, New York attorney general Eric Schneiderman launched a civil rights lawsuit against the firm (and Weinstein himself) for violating gender discrimination, sexual harassment, sexual abuse and coercion laws.
The suit explicitly said that any sale must see Weinstein’s victims compensated. And it seems that the sale—to an investor group led by former Small Business Administration head Maria Contreras-Sweet—has now fallen through.
In a letter to Contreras-Sweet on Sunday, The Weinstein Company said that last week the investors asked the company to work with them as partners “toward the common goal of saving the Company, preserving jobs and establishing a victims’ fund.”
The firm said this would have required urgent interim funding to stop it from going under, but this had not appeared. “Instead, you increased the liabilities left behind for the Company, charting a financial path that will fail,” The Weinstein Company said, alleging other failures on the investors’ part.
“While we deeply regret that your actions have led to this unfortunate outcome for our employees, our creditors and any victims, we will now pursue the Board’s only viable option to maximize the Company’s remaining value: an orderly bankruptcy process.”
In general, bankruptcies effectively end lawsuits against the company going bust—the New York attorney general’s suit would be an exception here, as it is a law enforcement suit. As soon as a company files for bankruptcy, the suits seeking damages are suspended. The only way plaintiffs can continue the suit is to demonstrate that the bankruptcy was filed for in bad faith, for example by proving that the firm had no other liabilities.
With The Weinstein Company reportedly in debt to the tune of $520 million (as calculated back in November), that probably means those suing the production firm will get no money from it.
That said, many of the suits named The Weinstein Company as a co-defendant. With the other co-defendants including Harvey Weinstein himself and, in the class action, his brother Bob Weinstein and their former production company Miramax, the plaintiffs may potentially still see a payout.
This article was updated to clarify that the New York AG’s suit would go ahead, bankruptcy notwithstanding.