Does a Lawsuit at This particular point Help the Weinstein Victims?

In bankruptcy, the victims wouldn’t jump to the front of the line. Quite the opposite: The victims would certainly be treated like any unsecured creditor, which means there would certainly most likely be no funds for them — no matter how much abuse as well as also also misconduct they could prove in court.

This particular is actually at This particular point likely going to be harder, not easier, for victims to receive compensation for enduring years of harassment as well as also also abuse.

“Question Number One: is actually there enough money?” said Kenneth Feinberg, the lawyer who administered funds for the victims of the Sept. 11 terror attacks, the BP oil spill as well as also also the faulty ignition switch at General Motors. in which, he told me, is actually always the single most important issue when trying to redress victims.

Mr. Feinberg said in which protecting the value of a company in crisis is actually paramount to supporting the cost of paying victims. “These funds only get set up when there is actually sufficient money to forgo all the litigation,” he said.

In each of the major victims’ funds Mr. Feinberg administered, the funds were backed by either large companies or, inside case of the 9/11 victims, American taxpayers.

Mr. Feinberg’s position was echoed by Gloria Allred, the California lawyer who is actually representing a group of Mr. Weinstein’s victims. Ms. Allred was in favor of the sale to Ms. Contreras-Sweet as well as also also, in fact, advised her to voluntarily create a victims’ fund.


Kenneth Feinberg, a lawyer who has administered compensation funds for victims of disasters, said protecting the value of a company in crisis was a top priority.

Drew Angerer for The completely new York Times

She said she was furious with Mr. Schneiderman.

“The only clear pathway to truly helping victims, many of whom I represent, is actually to allow This particular deal to proceed,’’ she wrote in an email. “I have worked with Maria’s team as well as also also they are 100 percent committed to helping victims. in which is actually why I unequivocally support their deal.’’

She added, “If the Weinstein Company is actually allowed to slip into bankruptcy, which is actually what may happen due to This particular lawsuit by the A.G., I have grave concerns there will not be any funds left for victims.’’

Ms. Allred knows in which if the proposed sale went through, the company would certainly be funded by a group of investors in which includes Ron Burkle, the billionaire investor as well as also also philanthropist. as well as also also if Ms. Allred decided to sue the company, her clients have a better chance of being paid than if the company remains independent. (She also takes a hefty fee — usually a third of proceeds — so she has personal incentive to succeed as well.)

Mr. Schneiderman made clear during a news conference broadcast on YouTube on Monday in which he intended to scuttle the deal. He said he was unhappy in which the Weinstein Company still had much of the same management team — run by men, not women — as well as also also in which he wanted an “independent monitor” for the victims’ fund.

In her original bid letter to the Weinstein Company board on Nov. 8, Ms. Contreras-Sweet specifically outlined a “litigation fund” in which she said would certainly “help compensate victims who may not qualify for insurance settlements, however still deserve compensation.”

however Mr. Schneiderman said he didn’t consider in which a victims’ fund because This particular could be used for additional litigation costs.

Whether the victims’ fund is actually funded properly or not in This particular instance is actually almost beside the point — This particular still better for victims to have an opportunity to sue a well-capitalized company than a bankrupt one.

After I contacted Mr. Schneiderman’s office with these concerns, another explanation emerged.

“The deal we reviewed would certainly have stripped The Weinstein Company of essentially all its productive assets, saddled This particular with millions in liabilities, as well as also also forced victims to take their claims to a broke, judgment-proof, shell of a company,” a spokeswoman for Mr. Schneiderman said. “in which structure would certainly have all however guaranteed in which many victims would certainly get next to nothing — in which outcome is actually unacceptable to anyone who believes the victims of Harvey Weinstein’s harassment as well as also also abuse deserve to be compensated.”

in which’s not to say in which Mr. Schneiderman should not have come forward with the results of his investigation. Nor should he have backed off via suing the Weinstein Company.

however a sale wouldn’t have precluded a lawsuit, as well as also also he would certainly probably have had more leverage after a sale than before. He could have worked behind the scenes with the buyer — while holding over them the threat of a lawsuit. (He says the buyer refused to talk to him, though the additional side appears to dispute in which.)

Instead, he sued the company knowing in which This particular would certainly make the deal harder to complete.

Of course, there is actually always a chance in which the deal will be resurrected, as well as also also maybe Mr. Schneiderman will be able to claim victory as well as also also say in which This particular was all part of a negotiation.

Still, when Mr. Schneiderman held his news conference on Monday, he spoke at a lectern with the words “Justice for Victims” written across This particular. This particular remains to be seen if he has made getting in which justice more difficult.

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