Judge upends Weinstein settlement, questioning its approach

Harvey Weinstein was convicted of sex crimes in February. Photo / Anna Watts, The New York Times

The judge questioned whether the women involved in the proposed $38 million settlement constituted a legal class. And he called $18 million to be allotted to Weinstein's and his former film company directors' legal fees "obnoxious."

A federal judge Tuesday upended a US$25 million ($38 million) proposed civil settlement between Harvey Weinstein, his former film company and dozens of women who have accused him of sexual harassment and misconduct.

In a contentious Tuesday morning hearing, Judge Alvin Hellerstein of the Southern District of New York denied a motion for preliminary approval of the settlement agreement. He questioned its overall fairness, and whether the women, whose allegations vary, constituted a legal class.

Suggesting the settlement plan was misconceived, he also questioned how the money would be allocated and called the millions of dollars in legal fees that would have been allotted to Weinstein and his former company directors "obnoxious."

The proposed deal, which also includes the New York attorney general and creditors of The Weinstein Co., has been controversial since its contours first came into view, in part because it did not require Weinstein to admit wrongdoing or make any payments to his alleged victims, relying instead on insurance coverage.

In the run-up to Tuesday's hearing, several alleged victims filed formal objections, calling the settlement unfair to the women on multiple counts.

"The judge identified so many problems, it was not even close," said John Clune, who represents one of the women objecting to the proposal. "Functionally, the whole thing has been thrown out," he said, referring to the agreement. "Everyone wants a good result for these survivors. This wasn't it."

In the proposed settlement, which also would have required approval from a federal bankruptcy court in Delaware, the insurance companies would pay US$12 million ($18 million) toward some, but not all, legal costs for Weinstein; his brother, Bob; and other former members of their company's board. The board members would be insulated from future liability, and the alleged victims would drop their claims against Weinstein and other executives.

"We have been saying for over a year and a half that the settlement terms and conditions were unfair and should never be imposed on sexual assault survivors," Douglas Wigdor and two other lawyers representing several women who had challenged the settlement said in a statement. "We were surprised that class counsel and the New York attorney general did not recognize this fact but are pleased that Judge Hellerstein swiftly rejected the one-sided proposal. On behalf of our clients, we look forward to pursuing justice against Harvey Weinstein and his many enablers."

In February, Weinstein was convicted of sex crimes against two women, a fraction of his numerous accusers, and was sentenced to more than 20 years in prison. The civil settlement has long been seen as the best hope of legal recourse for many of his other alleged victims.

The payout to the accusers was to be part of an overall US$47 million ($71 million) settlement intended to close out The Weinstein Co.'s obligations. Because the business is in bankruptcy proceedings, the women have had to make their claims along with its creditors.

In 2018, when the Weinstein Co. entered bankruptcy, the accusers watched a potential settlement payout dwindle from a projected $90 million victims' fund that had been discussed as part of a possible sale of the film studio.

Some of the women had agonised over whether to sign onto what they called a flawed settlement. By this year, after months of negotiations with the insurance companies, many of the parties had concluded that this proposed settlement was the best Weinstein's accusers could do.

"This agreement is a win for every woman who has experienced sexual harassment, discrimination, intimidation or retaliation by her employer," New York's attorney general, Leticia James, said in a statement last month.

Written by: Jodi Kantor and Megan Twohey
Photographs by: Anna Watts
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