Weinstein Company Buyer Should Set Up Victims Fund, Schneiderman Says
New York Attorney General Eric Schniederman is pressuring the future owners of Harvey Weinstein’s bankrupt company to pay victims who haven’t come forward yet. But finding someone to pay the potential legal damages has been fraught.
The Weinstein Company declared bankruptcy after widespread allegations of sexual misconduct. Schneiderman tried to broker a buyer for the company in hopes of setting aside a pot of money for the dozens of victims with legal claims. That effort fizzled, sending the company into bankruptcy. Still, Schneiderman is asking whoever ends up buying the company to sweeten its bid with money set aside for potential victims.
Jack Tracy with Debtwire, a bankruptcy research firm, says, “There’s no ramification if they ignore this letter. Under the bankruptcy code there’s nothing that says that you have to set money aside, money who in the bankruptcy waterfall are not entitled to a recovery.”
Tracy says that lawsuit claims are at the bottom of the list to get paid. In a letter to bidders, Schneiderman said the auction represents a unique opportunity to advance the public interest. It’s not yet clear how many will sue the Weinstein Company.