The Weinstein Co., which was co-founded by Harvey Weinstein, has filed for bankruptcy in Wilmington, Delaware. Dozens of women, at the least, may wish to sue the company for its alleged role in concealing sexual misconduct complaints against Harvey Weinstein. Filing for bankruptcy generally halts lawsuits against the bankrupt individual or company, putting them off until the proceedings are complete. In this case, however, the bankruptcy judge has ruled that the company will not be immune from litigation.
A group of women has filed a potential class action against the company in New York. They estimate they may end up representing the interests of as many as 100 women who claim to have been harassed or otherwise violated by Harvey Weinstein. They asked the bankruptcy judge to allow their lawsuit to move forward and to order the release of Harvey Weinstein’s employment contract.
The Weinstein Co. objected to the lawsuit moving forward during the bankruptcy, arguing that it would only serve to distract the company from an “efficient and orderly liquidation process.”
The judge, noting that the Weinstein Co. is planning to sell off all of its assets and close down, ruled that the lawsuit could move forward before the bankruptcy is complete. If the lawsuit is successful, any proceeds from the verdict or settlement would be paid out of the bankruptcy estate if funds are available.
Harvey Weinstein’s employment contract was also released to the plaintiffs. According to a lawyer representing the alleged victims, the contract demonstrates that the Weinstein Co. actively facilitated Harvey Weinstein’s actions. A Weinstein Co. attorney declined comment.
The company could be held financially responsible for some or all of Harvey Weinstein’s actions if it can be shown that they either facilitated or helped to conceal them.
“I am overwhelmingly grateful,” said one of the plaintiffs in an email, “as this decision marks another important milestone toward a new standard of accountability to abuses of power.”
If a high-ranking member of your organization is accused of sexual harassment or misconduct, it is important to know that the organization can be held liable if its actions significantly contributed to the problem. In some cases, these claims can follow you even into bankruptcy.
