The company went bankrupt last year, as it faced hundreds of millions of dollars in debt and numerous civil suits on behalf of Weinstein’s alleged victims. The company sold to Lantern Capital Partners in July 2018 for $289 million. Since then, attorneys have been haggling about how to apportion the proceeds among the company’s creditors, including the alleged victims, and among the bankruptcy professionals working on the case.
A mediator has been working on the issue, off and on, since last year. Talks have included representatives of the New York Attorney General’s Office and various insurance companies. Attorney Adam Harris, who represents Bob Weinstein, the former chairman of the company, told Delaware Bankruptcy Judge Mary Walrath on Thursday that the parties reached a deal in principle on Wednesday.
“We now have an economic agreement in principle that’s supported by the plaintiffs, the A.G.’s office, the defendants, and all the insurers, that if approved would provide significant compensation to victims, creditors of the estate, and allow the parties to avoid years of costly, time-consuming and uncertain litigation on all sides,” Harris said. “I personally am very optimistic given everything the parties have been through to date that this is the right solution.”
Robert Feinstein, an attorney for the committee of unsecured creditors, told the judge that the parties are expected to meet next Wednesday with the mediator in an effort to hammer out remaining details.
“The end goal of that mediation is to do a global settlement of the class action and all the tort claims against the Weinstein Co.,” Feinstein said. “I think we’re poised to get there.”
Feinstein said that the talks were spurred by a recent debtor’s motion to liquidate the estate. He said the bankruptcy estate is running low on cash, and it would be best to conclude a deal before the funds are further depleted by professional fees. He said that there had recently been a renewed offer, and then an “improved” offer that was approved by all the parties in mediation. He declined to cite a figure, saying it would be inappropriate.
A bankruptcy settlement would have no effect on Weinstein’s criminal case. The former producer is set to go on trial in Manhattan in September on five counts, including rape and predatory sexual assault. He faces the possibility of life in prison if convicted.
The Wall Street Journal reported Thursday that the parties had arrived at a figure of $44 million, of which $30 million would be set aside for accusers, their attorneys, and other creditors. The remaining $14 million would go to attorneys’ fees for Weinstein Co. board members. Elizabeth Fegan, an attorney who represents Weinstein accusers in a class action case, declined to comment on that figure.
The Attorney General’s Office, which sued the Weinstein Co. for gender discrimination in February 2018, was initially pushing for a victims’ fund of $90 million before the company went bankrupt.