NEW YORK/CHICAGO (REUTERS) - The Weinstein Company's bankruptcy filing will not protect ex-chairman Harvey Weinstein, who has been accused of sexual harassment and assault, an attorney for the studio told US Bankruptcy Court Judge Mary Walrath on Tuesday (March 20).
"We are not here to protect Harvey Weinstein," attorney Paul Zumbro said. "(The Weinstein Company) filing for bankruptcy relief in no way affects anyone's ability to pursue civil or criminal claims against Harvey Weinstein."
Weinstein, who co-founded the company with his brother Bob and once was one of Hollywood's most influential men, has been accused of sexual misconduct including rape by more than 70 women. He has denied having non-consensual sex with anyone. It has been unclear how his alleged victims would be treated in a potential bankruptcy filing.
The Weinstein Company filed for bankruptcy late Monday after it spent months looking for a buyer or investor. Texas private equity firm Lantern Capital agreed to buy the Company out of bankruptcy for US$310 million (S$408.8 million), setting the floor for other bidders in a court-supervised auction scheduled for later this spring.
The bankruptcy will halt victim's lawsuits against the company and any sexual misconduct claims would likely be compensated only after secured creditors are paid in full. A failed offer for the studio from former Obama administration official Maria Contreras-Sweet included an US$80 million to US$90 million compensation fund that would supplement any insurance payouts victims would receive.
As part of the bankruptcy filing, the Weinstein Company said it released anyone "who suffered or witnessed any form of sexual misconduct by Harvey Weinstein" from nondisclosure agreements.
"Since October, it has been reported that Harvey Weinstein used non-disclosure agreements as a secret weapon to silence his accusers. Effective immediately, those 'agreements' end," the company said in an emailed statement.
In court Tuesday, the film studio also received approval to tap some of its bankruptcy loan to make payroll for its remaining employees.
The Weinstein Company, which has won 28 Academy Awards, owns a film library of 277 feature films that have generated over US$2 billion in aggregate box office receipts worldwide.
Yet the company said in court papers it has lost about 25 percent of its workforce and many of its longtime business partners since October 2017, when accusations against Harvey Weinstein became public.
"It is an understatement to say that the last six months have been trying for the company," Chief Restructuring Officer Robert Del Genio said in court papers.
The studio has spent months looking for a buyer or investor. Before the deal with Contreras-Sweet failed, the company had tried securing rescue financing from other investors.
Lions Gate Entertainment Corp had made an earlier offer for some of the company's assets, as had Qatar-owned film company Miramax, which was founded by Harvey Weinstein and Bob Weinstein. Both could be among potential bidders in the auction.
Movie producer Killer Content also said bankruptcy would be the best option for the company and that it may be interested in the studio's assets in a bankruptcy auction.
Launched in October 2005, the studio produced and distributed critically acclaimed hits including The King's Speech and Silver Linings Playbook, as well as TV series such as long-running fashion reality competition Project Runway.