Some of Harvey Weinstein’s accusers say they are being pressured by greedy lawyers to accept a low-ball deal and end their lawsuits against the disgraced movie mogul.
Several people with knowledge of the situation tell The Daily Beast the proposed settlement for all the women is around $47 million, and nearly a third of that sum—$14 million—would go toward Weinstein’s defense fees.
The remaining $33 million would be divided among creditors of Weinstein’s former studio, former employees, and the alleged victims. According to the people familiar with the matter, 25 percent of the victims’ windfall would go to paying the class-action lawyers.
The settlement, expected to be announced in the next month, is an attempt to resolve almost all of the sexual harassment claims against Weinstein—including a class-action suit, a suit filed on behalf of his former employees, and several filed by individual accusers.
Attorneys for two potential holdouts say they’re being bullied to sign the deal by Weinstein’s lawyers and the class-action attorneys.
“My grandfather used to be in the fruit business in Brooklyn,” Thomas P. Giuffra, an attorney for one of the plaintiffs suing on her own, told The Daily Beast. “Guys would show up offering protection. This feels a lot like that.”
“They are giving the money that should go to my client to the guy who raped her,” Giuffra added, explaining that if the defense fees are included in the settlement, Weinstein doesn’t have to pay them. “It takes a cruel and devious mind to come up with such a mean spirited and bullying agreement.”
Beth Fegan, the lead attorney for the class action, denied pressuring the individual plaintiffs to sign the deal and said she had been completely transparent about her fees, which must be approved by the court.
“We have signed agreements with each of our clients that detail the fee arrangement. We never said we were taking on this case as a pro bono case. As always, we’re abundantly clear about how our work is compensated if we are successful on our clients’ behalf,” Fegan said in a statement.
The New York State Attorney General’s office said last year that it had reached a deal with investors looking to buy the Weinstein Company that included a victim’s compensation fund of between $80 million and $90 million—but that was before the company declared bankruptcy. Now the proposed settlement is about half that amount, and will be covered entirely by insurance companies.
Douglas Wigdor is representing Weinstein accuser Wedil David, which means he would get a cut of any payout to her. But he noted that Fegan will collect up to 25 percent from every check cut in the class-action case, even to accusers she does not represent, and stands to make millions off the case.
In December, Fegan told lawyers for the other victims that she would take “no more than 20 percent” in fees for her services. But according to an email reviewed by The Daily Beast, that had swelled to up to 25 percent by this spring.
“If the matter doesn’t settle as a class, [Fegan] will likely receive a very small fraction of that,” Wigdor said. “She has every motivation to get this deal done—even if that means agreeing to a settlement that attempts to bind non-participating victims of sexual assault.”
Fegan said there was nothing unusual about the lower settlement package or her fees.
“I’ve been negotiating class-action settlements for most of my career and it is always a complex, dynamic process. Our focus is to deliver the best outcome to our clients, whether by judgment or settlement. Both in the class case and in multiple individual cases, the courts have issued a series of adverse rulings dismissing claims against the director defendants,” she said. “You would expect these adverse rulings, as well as The Weinstein Company bankruptcy, to reduce any available proceeds that may be recoverable at trial or in any settlement.”
At one point, Fegan’s firm even suggested they would force Wigdor’s client to accept the settlement, using a legal maneuver called a channelling injunction that requires all future claims to be paid out under the same agreement.
Giuffra, who represents Alexandra Canosa, who has accused Weinstein of raping her and sexually abusing her over five years, accused Fegan of “hijacking” the negotiations.
“She’s selling out the victims,” Giuffra said, exasperated. “It’s outrageous.”
Fegan denied strong-arming Canosa or David, saying she had never even spoken to the accusers. “In fact, they have not participated in settlement negotiations over the last six months by their lawyers’ choice, and have the right to continue prosecuting their individual cases,” she said in an email to The Daily Beast.
The judge in Fegan’s case, Alvin Hellerstein, dramatically scaled back the scope of the suit in April, dropping 17 of the claims to eliminate all defendants except Weinstein. The Weinstein Company also filed for bankruptcy in March, after a potential sale collapsed. Fegan said both events reduced the amount of money available to victims through trial or settlement.
Wigdor and Giuffra said they also felt backed into a corner by Weinstein’s attorneys, who they claim have refused to hand over crucial documents. Giuffra said Weinstein’s lead attorney, Elior Shiloh, is currently attempting to subpoena his client’s father, who lives in England, and her husband, whom she did not know at the time of the alleged assault.
In an email to victims’ attorneys last spring, Shiloh warned there was “a tiny window” in which to settle and that “action would have to be taken ASAP”—a message the attorneys viewed as a threat. A month later, he was in their inboxes again, warning, “Everyday that goes by the insurers lose interest.”
Shiloh did not respond to multiple requests for comment.
The settlement would also affect the case of actress Ashley Judd, who sued Weinstein in April for allegedly spreading lies about her after she rebuffed his advances. Judd and her lawyers have had no part in the class-action negotiations, but language included in the agreement would release Weinstein’s insurers from covering any of the actress’ claims.
“Ashley Judd’s case against Harvey Weinstein is ongoing and we intend to bring it to trial and vindicate her rights in open court,” Theodore J. Boutrous Jr., the lead lawyer representing Judd, told The Daily Beast. “She is not and never has been part of any settlement.”
Actress Rose McGowan, one of the first people to publicly accuse Weinstein of sexual assault, also filed a case against him this week. The suit accuses Weinstein and his attorneys, David Boies and Lisa Bloom, of conspiring to silence her and discredit her sexual assault claims. It is unclear if the settlement will affect her case.
Weinstein’s criminal trial is set to get underway in January. He faces two counts of predatory sexual assault, one count of criminal sexual act and two counts of rape. He has pleaded not guilty to all charges and denies all allegations of nonconsensual sex.
Wigdor and his client plan on protesting the settlement and proceeding with their suit against Weinstein. “I’m very upset that all of these parties, including the AG’s office, would turn a blind eye to this,” he said.