Weinstein Seeks to Pursue Arbitration Over Firing

Disgraced Hollywood film mogul and convicted rapist Harvey Weinstein is asking a bankruptcy judge in Delaware to allow him to pursue arbitration in New York over what he claims is his wrongful termination from the company he co-founded.

An attorney for Weinstein submitted a court filing this week asking the judge who is presiding over The Weinstein Co. bankruptcy to lift the automatic stay that halts outside legal proceedings involving Chapter 11 debtors so he can pursue the arbitration case he filed in 2017.

“Newly discovered information and facts, gleaned during the course of investigation and discovery in collateral matters, have yielded evidence that corroborates the wrongful termination claim that is subject of the arbitration,” Weinstein attorney Julia Klein wrote.

Klein also said there has been no willful delay in seeking to lift the bankruptcy stay in order to proceed with the arbitration.

“Movant has been involved in one of the most publicized criminal proceedings in recent history, after which he was convicted and sentenced to a term of incarceration of 23 years, and is also defending against numerous civil claims, while facing additional prosecution in California,” she noted. “All while movant has suffered from increasing ill health and medical issues.”

The Weinstein Co. sought bankruptcy protection in March 2018 amid a sexual misconduct scandal that brought down Weinstein and triggered a nationwide movement to address predatory sexual behavior and harassment in the workplace. Weinstein was sentenced to 23 years in prison earlier this year after being convicted in New York of rape and sexual assault.

Prosecutors in Los Angeles are seeking his extradition to California to face charges of raping a woman and sexually assaulting another in 2013.

According to Wednesday’s court filing, Weinstein in 2015 entered into an employment agreement with The Weinstein Co. that includes a provision requiring binding arbitration in New York for any dispute between the parties, including claims for discrimination and for violation of any federal, state or local law.

The company fired Weinstein in October 2017 just days after The New York Times published a story detailing decades of sexual harassment allegations made against him by actresses and employees. Weinstein filed an arbitration demand two weeks later, asserting violations of the employment agreement and related state law claims.

The future of the bankruptcy case remains up in the air following a decision by a federal judge in New York last month to reject a proposed $19 million settlement between Weinstein and some of his accusers. Lawyers for several other alleged victims had opposed the deal, which also would have required approval by the bankruptcy court.

The proposed settlement amount was included in a plan proposed in the bankruptcy case to create a $46.8 million fund to settle claims against Weinstein and other company officials and to cover their defense costs.

Attorneys for two women who have filed lawsuits alleging they were sexually assaulted by Weinstein have asked the bankruptcy judge to convert the Chapter 11 case to a Chapter 7 liquidation. Doing so would reduce the amount of money going to professionals and allow a trustee to pursue civil claims on behalf of the bankruptcy estate against Weinstein and other company officials, they argue.

Attorneys for the company and the official committee of unsecured creditors have asked the judge to give them until Aug. 31 to try to negotiate a revised plan that would eliminate class action treatment of sexual misconduct claims and would be overseen exclusively by the bankruptcy court, with no involvement by the New York district court.

Attorneys for the two women contend that any revised bankruptcy plan would still be dictated and funded by self-interested insurance companies who are not fiduciaries of the bankruptcy estate and not working in the best interests of Weinstein’s victims.

“A threshold issue, therefore, is whether the insurance companies will be permitted to rent this court, with the debtors and committee acting as their proxies, and have this court invoke its most robust powers and jurisdiction, to silence forever victims of rape, sexual assault and sexual harassment,” they wrote in a recent court filing.

A hearing in the case is scheduled for Sept. 2.