Four of Harvey Weinstein’s accusers filed a motion on Tuesday to block the payout of a $35.2 million bankruptcy plan, including $17.1 million for 50 of Weinstein’s sexual misconduct victims.
The four accusers — Wedil David, Dominique Huett, Alexandra Canosa and Aimee McBain — argue that the plan immunizes Weinstein Co. board members and employees from legal liability for their part in Weinstein’s misconduct.
A bankruptcy judge approved the plan on Jan. 25, finding that it provided the best opportunity for victims to obtain some payout, and 83% of Weinstein’s accusers voted to accept it.
The dissident accusers filed a notice in Delaware bankruptcy court on Tuesday indicating that they would appeal to the U.S. District Court in Delaware. They also filed a motion for a stay, seeking to prevent the distribution of funds pending the outcome of the appeal, which could end up before the 3rd Circuit Court of Appeal.
Under the bankruptcy plan, a claims examiner will assess each accuser’s allegations against Weinstein, and divide up the $17.1 million victims fund in proportion to the severity of the claims. In order to receive the full amount, each accuser will have to grant a waiver absolving Weinstein of further responsibility. If she chooses not to, she will forfeit 75% of the award and will be allowed to pursue her case against Weinstein in civil court.
The dissident accusers claim that Weinstein and the former company directors and officers are receiving a benefit of bankruptcy — a de facto discharge of a debt — without having to declare bankruptcy themselves or contribute anything to the company bankruptcy plan.
“These releases should only be made available to aid the debtor’s discharge and reorganization,” their attorneys argue. “Otherwise, as is the case here, third parties are receiving more robust relief from the Court than the Debtors are entitled to receive.”
The $35.2 million payout comes from insurance proceeds. The plan also includes $9.7 million for the company directors and officers to pay their legal bills, and $8.4 million to pay debts to companies that did business with the Weinstein Co. The bankruptcy attorneys who worked on the case have already received $26 million in fees, and the bills continue to accrue.
Weinstein is serving a 23-year sentence in state prison in New York for rape and sexual assault. He is also awaiting extradition to Los Angeles to face additional criminal charges there. In addition, he is expected to sit for a deposition sometime in the next month in one of the civil cases pending against him.
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