'Outrage' over Harvey Weinstein sex abuse settlement offer: Too little money for victims, too much for attorneys and Harvey

'Outrage' over Harvey Weinstein sex abuse settlement offer: Too little money for victims, too much for attorneys and Harvey
By: WNG CNBC Posted On: December 12, 2019 View: 38

'Outrage' over Harvey Weinstein sex abuse settlement offer: Too little money for victims, too much for attorneys and Harvey

Harvey Weinstein leaves Manhattan Criminal Court, using a walker, following a hearing on December 11, 2019 in New York.

Bryan R. Smith | AFP | Getty Images

Lawyers for several women who claim fallen film producer Harvey Weinstein sexually abused them on Thursday harshly criticized a proposed settlement of legal claims against The Weinstein Companies — saying the deal offers far too little money to victims, far too much cash to Weinstein's attorneys and possibly could financially benefit Weinstein himself.

"I think it's an outrage," said lawyer Thomas Giuffra of the proposed deal, which calls for a pool of $25 million to be set aside for Weinstein victims by insurers of the company that he ran with his brother Bob Weinstein.

"It's a lousy number, it's way too low," said Giuffra, who called the overall design of the settlement "crazy."

The lawyer represents producer Alexandra Canosa, who has said Weinstein raped and sexually abused her.

Douglas Wigdor, a lawyer for three Weinstein accusers said, "This is the worst settlement I've seen in my entire career."

"It's a complete disaster," Wigdor added. "It leaves very little to the victims."

Wigdor represents actress Wedil David, who is opposing the deal. His other clients include a woman who was a minor at the time of the alleged abuse, who has a claim against Weinstein and the Disney company, and a woman who will testify against Weinstein in his criminal case.

Both Wigdor and Giuffra, who practice in New York, said they will oppose approval of the proposed settlement — which would set aside an additional $12 million to pay toward the legal costs of Harvey and Bob Weinstein, as well as of such costs for directors of their company.

The lawyers noted that if there is money left over from the victims' settlement pool, it would go to business creditors of the company, as well as toward the directors' and Weinsteins' legal defense costs, leaving the brothers better off financially than they otherwise would be.

Complicating the situation is the fact that lawyers for other women who have claims against Weinstein are in favor of the proposed deal, saying it is the best result possible in light of several factors, if not the ideal outcome.

More than 30 women have accused Weinstein of sexual abuse, and additional claims by other women are considered likely. While some of the women are guaranteed $500,000 each, the other victims, both current and those with future claims, do not know how much they could get under the deal.

Weinstein is due to go on trial in January in Manhattan court on criminal charges of sexually assaulting two women. He has pleaded not guilty in that case.

The proposed civil settlement deal, whose details were first reported Wednesday by The New York Times, needs the approval of a federal bankruptcy judge to go into effect because it would be executed as part of The Weinstein Company ongoing bankruptcy protection case.

The company and a spokesman for New York Attorney General Letitia James, whose office was involved in crafting the settlement, declined to comment.

The total proposed deal is valued at $47 million, and would be funded by the Weinsten insurers.

After the $25 million or so for victims, and $12 million earmarked for legal defense costs for the Weinstein brothers and company directors, the remainder of the $47 million would go toward business creditors of The Weinstein Companies, lawyers said.

Giuffra told CNBC that Elizabeth Fegan, a Chicago lawyer who represents women pursuing a class-action lawsuit against The Weinstein Company, has pushed for the deal, and that the terms for the victims have gotten worse as Fegan has suffered setbacks in court.

Fegan's spokeswoman issued a statement to CNBC on her behalf.

"It is important to recognize that while there is a great deal of attention focused on the proposed settlement, it is not a final settlement and it would be inappropriate for me, or for anyone involved in the litigation, to talk about specifics," Fegan said.

"Once we are able to finalize the settlement and receive the court's approval, I will have a great deal more to say."

The statement said Fegan represents nine of the 28 women who are party to the suit. "Members of the class that I represent will be able to make a claim to the victims' fund and may receive up to $750,000 each if the settlement is approved," she said. "We are proud of what we have accomplished for the survivors. I wish other plaintiffs no ill will for their desire to continue to prosecute Harvey Weinstein."

Wigdor, who with Giuffra is opposing the deal, said the terms are worse than they otherwise could be because the Weinstein insurers are covering the full cost of the proposed settlement, instead of demanding that Weinstein and the company directors personally pay out some money toward it.

"There is a lot of intentional conduct that occurred here," Wigdor said, referring both to Weinstein's alleged sexual abuse and the directors' hiding it by paying out financial settlements to victims.

"The insurance companies could tell Harvey and directors they need to pony up some money" by claiming their policies do not cover such conduct, Wigdor said. "In my experience is, that happens all the time. In this case, insurers and defendants have become emboldened in the negotiation process."

Giuffra echoed that.

"It's wrong that these directors [of The Weinstein Company] are getting over half of what the victims are getting when they turned a blind eye and enabled Harvey Weinstein for years," Giuffra said. He also objects to the The Weinstein Company creditors being paid out by insurers to the detriment of victims.

"If you're looking at this, morally the right thing to do is to get anything you can out of this corpse [of a company] to the people who are most victimized by this monster," Giuffra said.

Giuffra warned that if the deal is approved by the bankruptcy judge over his and Wigdor's objections, and their clients don't accept its terms, "Wigdor and I are in lock-and-load and we will go after Harvey Weinstein" personally.

Weinstein for years had been one of the most powerful men in Hollywood, having backed a long string of financially successful and criticially acclaimed movies.

But in October 2017, The New Yorker magazine and The New York Times published exposes of his rampant serial abuse of women, a number of whom were well-known actresses, and of the secret financial payouts The Weinstein Company had made to keep his victims from going public with their claims.

The articles sparked the so-called MeToo movement, and the demise of the careers of a number high-profile men who have been accused of sexually harassing and assaulting their female colleagues and other women.

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