A U.S. bankruptcy judge has ruled that the Weinstein Co. must face a lawsuit brought by Harvey Weinstein’s alleged victims. The company, which is in bankruptcy, had claimed that dealing with the lawsuit would interfere with an “efficient and orderly liquidation process.” The judge ruled that, since the company is going out of business and liquidating its assets, the bankruptcy process does not shield it from lawsuits. If the bankruptcy had been completed before the lawsuit, there would be no one left to sue.
As we discussed in March, the Weinstein Co. released potential victims from any nondisclosure agreements they may have signed with the company. However, there may be releases and waivers still in effect that would make it difficult for victims to bring claims against the company or against Harvey Weinstein himself. That said, any such releases or waivers could be subject to review by courts, which might view some of them as attempts to cover up illegal acts. That could make them unenforceable.
“We are not here to protect Harvey Weinstein,” said an attorney for the Weinstein Co. in March.
The group of alleged victims has filed suit in federal court in New York and they are seeking to represent other victims as a class. The group estimates that there could be hundreds of plaintiffs in the class.
“Weinstein’s widespread sexual misconduct did not occur without the help of others,” argued a lawyer for the women. The lawsuit alleges that either Harvey Weinstein was acting within the scope of his employment when he engaged in the misconduct, or that the company helped conceal the misconduct, making the Weinstein Co. legally responsible.
To gain more insight into the company’s potential liability, the plaintiffs also sought access to Harvey Weinstein’s employment contract. The firm fought to keep it secret, but the bankruptcy judge ordered the contract released. According to plaintiffs’ counsel, the contract indicates that the company facilitated Weinstein’s actions. An attorney for the company declined to comment to Bloomberg.
“The motion granted today brings victims one step closer to the day in court we deserve, in allowing our case to move forward,” said one plaintiff. “I am overwhelmingly grateful as this decision marks another important milestone toward a new standard of accountability to abuses of power.”
A grand jury has charged Harvey Weinstein with several felony sex crimes. Weinstein has pled not guilty to the charges.
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