The unsecured creditors in the Weinstein Co. bankruptcy have hired Pachulski Stang Ziehl & Jones, a firm that has represented sexual abuse victims in a dozen bankruptcies involving the Catholic Church.
The five-member committee of unsecured creditors includes two alleged victims of Harvey Weinstein’s abuses: his former assistant Sandeep Rehal and former actress Louisette Geiss. The committee also includes WME, Cinedigm, and Light Chaser Animation, a Chinese animation studio. Geiss, who filed a suit alleging that Weinstein tried to force her to watch him masturbate in 2008, will chair the committee.
James Stang, a partner at the firm, will be among the attorneys representing the unsecured creditors. The committee’s goal will be to maximize the value of the Weinstein Co. estate in order to get the greatest possible recovery. The firm’s involvement is a sign that the committee may take an aggressive approach, possibly even suing Harvey Weinstein to recover funds that he may owe the company.
“It is not unusual in a bankruptcy case that one would look for assets that may be recoverable,” Stang told Variety in an interview. “The committee is going to look at potential liability of third parties, other than the Weinstein Co., and that would include Harvey Weinstein. That’s a given.”
As of now, it appears that there will be relatively little money available for victims. The Weinstein Co. has listed more than $500 million in debts, of which $345 million is owed to banks and other secured lenders. A stalking horse bid comes to just $425 million, including the assumption of $115 million in debt and $310 million in cash. The company does have up to $30 million in insurance coverage, which could be available for victims.
In the Catholic Church cases, Stang has filed suits to bring assets into the estates for the benefit of abuse victims. In a case last year involving a diocese in Montana, Stang sued to bring $70 million of parish assets into the estate. In the bankruptcy of the Archdiocese of Milwaukee, he sought to include $60 million from the church’s cemetery trust. In 2011, Stang sued a Jesuit order in Portland, Ore., arguing that $3.1 million earmarked for education should have gone into the bankruptcy estate.
The Weinstein Co. is hoping for a fast sale to Lantern Capital, as it struggles to keep the company in business. The company has asked for an auction date of May 2, with bids due by April 30. Any objections to that timeline are due to be filed by Tuesday at 4 p.m. A hearing on the bidding procedures is set for next Friday.
Stang said he was not yet sure whether the committee would file an objection. He said he had a preliminary conversation with the Weinstein Co., which went well.
“I hope we will continue having a cooperative relationship with them. They seem to want to have that with us,” he said. “We want to keep expenses down as much as possible and move this along so everybody — the women, the trade creditors — can get as quick a recovery as possible.”
According to the bankruptcy filings, Light Chaser Animation is owed $2.25 million and Cinedigm is owed $902,806. WME, in addition to being an unsecured creditor, also represents Ashley Judd, who was among the first actresses to come forward with allegations against Weinstein. Rehal has sued, alleging that she was subjected to abuse and harassment, and that she was compelled to facilitate Weinstein’s sexual encounters.
Other unsecured creditors include Disney, Sony, CAA, Wanda Pictures, Viacom, and numerous law firms.
Also representing the unsecured creditors are Bradford J. Sandler, Debra I. Grassgreen, and Robert J. Feinstein.