Does a Lawsuit Now Help the Weinstein Victims?

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“The one clear pathway to really serving to victims, a lot of whom I characterize, is to permit this deal to proceed,” she wrote in an electronic mail. “I’ve labored with Maria’s staff and they’re 100 % dedicated to serving to victims. That’s the reason I unequivocally assist their deal.”

She added, “If the Weinstein Firm is allowed to slide into chapter 11, which is what could occur on account of this lawsuit by the A.G., I’ve grave considerations there is not going to be any funds left for victims.”

Ms. Allred is aware of that if the proposed sale went via, the corporate could be funded by a bunch of buyers that features Ron Burkle, the billionaire investor and philanthropist. And if Ms. Allred determined to sue the corporate, her shoppers have a greater likelihood of being paid than if the corporate stays impartial. (She additionally takes a hefty payment — normally a 3rd of proceeds — so she has private incentive to succeed as nicely.)

Mr. Schneiderman made clear throughout a information convention broadcast on YouTube on Monday that he supposed to scuttle the deal. He mentioned he was sad that the Weinstein Firm nonetheless had a lot of the identical administration staff — run by males, not ladies — and that he needed an “impartial monitor” for the victims’ fund.

In her unique bid letter to the Weinstein Firm board on Nov. eight, Ms. Contreras-Candy particularly outlined a “litigation fund” that she mentioned would “assist compensate victims who could not qualify for insurance coverage settlements, however nonetheless deserve compensation.”

However Mr. Schneiderman mentioned he did not take into account victims’ fund as a result of it could possibly be used for different litigation prices.

Whether or not the victims’ fund is funded correctly or not on this occasion is nearly irrelevant — it nonetheless higher for victims to have a chance to sue a well-capitalized firm than a bankrupt one.

After I contacted Mr. Schneiderman’s workplace with these considerations, one other rationalization emerged.

“The deal we reviewed would have stripped The Weinstein Firm of basically all its productive belongings, saddled it with tens of millions in liabilities, and compelled victims to take their claims to a broke, judgment-proof, shell of an organization,” a spokeswoman for Mr. Schneiderman mentioned. “That construction would have all however assured that many victims would get subsequent to nothing — that end result is unacceptable to anybody who believes the victims of Harvey Weinstein’s harassment and abuse need to be compensated.”

That is to not say that Mr. Schneiderman mustn’t have come ahead with the outcomes of his investigation. Nor ought to he have backed off from suing the Weinstein Firm.

However a sale would not have precluded a lawsuit, and he would most likely have had extra leverage after a sale than earlier than. He might have labored behind the scenes with the customer — whereas holding over them the specter of a lawsuit. (He says the customer refused to speak to him, although the opposite facet seems to dispute that.)

As a substitute, he sued the corporate figuring out that it will make the deal more durable to finish.

After all, there’s at all times an opportunity that the deal shall be resurrected, and possibly Mr. Schneiderman will have the ability to declare victory and say that this was all a part of a negotiation.

Nonetheless, when Mr. Schneiderman held his information convention on Monday, he spoke at a lectern with the phrases “Justice for Victims” written throughout it. It stays to be seen if he has made getting that justice tougher.

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