The judge presiding over the Weinstein Co. bankruptcy has overruled objections to a disclosure statement outlining a revised plan providing about $35 million for creditors, with roughly half that amount going to women who have accused disgraced film mogul Harvey Weinstein of sexual misconduct.
The judge on Thursday overruled objections to the disclosure statement by attorneys representing 11 women, including producer Alexandra Canosa and actresses Wedil David and Dominique Huett, who oppose the proposed settlement.
U.S. Bankruptcy Judge Mary Walrath said the group's objections were "not well-stated." Her ruling means the company can begin soliciting votes on the plan by holders of sexual misconduct claims and general unsecured claims. Ballots are due by Dec. 8, and a hearing on whether Walrath will approve the plan is set for Dec. 18.
Attorneys said 65 tort claims were filed by the Oct. 31 deadline, although it's unclear whether sexual misconduct claims account for the entire total. Company attorneys have said they will not seek approval of the plan if holders of sexual misconduct claims vote to reject it.
Zhao Liu, an attorney for the group of women who already have made their opposition known, described the proposed settlement as "pathetically meager" and said it was an attempt to "silence" Weinstein's victims. She also argued that the plan unfairly puts women who said they were raped and those who were subject merely to "inappropriate conduct" in the same category for voting purposes.
The objectors, known as the "David claimants," also sought permission to access confidential information about women who have filed claims in the bankruptcy case and to discuss their position with other tort claimants.
The request came despite court-approved confidentiality procedures to protect the privacy of women holding sexual misconduct claims.
Weinstein Co. attorney Paul Zumbro told Walrath that it would be "entirely inappropriate" for the objecting claimants, who he said have an interest in disallowing claims filed by other women, to have access to their protected confidential information.
"This is a pretty unseemly proposition, your honor," Zumbro said.
Zumbro said plan proponents have already agreed to add language to the disclosure statement noting that the David claimants object to the plan and providing contact information for their lawyers if other claimants want to reach out to them.
Zumbro said the company also has addressed objectors' concerns that claims filed by other women are valid. An attorney for the official creditors' committee plans to personally review all claims to see if any are facially invalid. To be valid, a claim of sexual misconduct by Weinstein must deal clearly with events that occurred on or after June 30, 2005. The plan does not include contributions from insurers for the resolution of certain "Miramax era" claims that arose prior to Harvey Weinstein leaving that company and forming the Weinstein Co.
The settlement amount is $11.5 million less than under a previous plan, which was scrapped after a federal judge in New York refused to approve a proposed $19 million settlement between Weinstein and some of his accusers. The settlement in that purported class-action lawsuit was a key component of the initial bankruptcy plan.
Roughly half of the current settlement amount, about $17 million, is allocated for a single sexual misconduct claims fund, down from about $25.7 million allocated for three separate categories of sexual misconduct claims under the previous plan. Another $8.4 million would go to a liquidation trust for resolving non-sexual misconduct claims, and $9.7 million would be used to reimburse defense costs for company officials other than Weinstein.
The sexual misconduct claims will be evaluated on a point system allowing a maximum 100 points. That includes up to 60 points for physical sexual misconduct claims, a maximum 30 points for claims of nonphysical sexual misconduct, and up to 10 points for claims of emotional distress and economic harm. A claims examiner will have the authority to adjust point totals up or down based on factors such as age, corroborating evidence, prior or pending litigation, and applicable statutes of limitation.
Based on the number of filed tort claims, and assuming an average point award of 50 for illustrative purposes only, each point would be valued at about $4,950, according to court documents. Under that scenario, 25 points would result in a distribution of $123,750, while 50 points would bring $247,500. A point award of 75 points would equate to $371,250, and 100 points wothat's uld result in a distribution of $495,000.
Holders of sexual misconduct claims would receive 100% of the liquidated value of their claims if they agree to release Weinstein from all legal claims. A claimant who elects not to release Weinstein but to retain the option to sue him in another court would receive 25% of the value of her bankruptcy claim.
