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Case Against Weinstein Encounters Challenges

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Just five months ago, disgraced Hollywood mogul Harvey Weinstein was escorted in handcuffs past a phalanx of reporters and photographers and into the Manhattan Criminal Courts Building where a grand jury had voted to indict him, setting the stage for arguably the most important prosecution of the #MeToo era. But now the case against Weinstein appears to be fraying, the New York Times reported. A detective failed to turn over important evidence to prosecutors. A judge dismissed part of the indictment. Evidence has emerged undermining the allegation of one of the accusers. In addition, assistants of Manhattan District Attorney Cyrus R. Vance Jr., thought that once they filed charges, a flood of new complaints might lead to more victims being added to the case. It has not worked out that way. Prosecutors maintain they are still interviewing potential victims, and that the evidence remains strong enough to win a conviction, even with just two women to testify against Weinstein. “We are moving full speed ahead,” the lead prosecutor on the case, Joan Illuzzi, said in court. But Mr. Weinstein’s lawyer, Benjamin Brafman, has argued that the entire indictment was contaminated because prosecutors failed to show the grand jury evidence favorable to his client. So far, Justice James Burke has only dismissed one charge related to Lucia Evans, a marketing executive.

Harvey Weinstein’s Former Studio Ordered to Turn Over Business Records

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A judge yesterday ordered Harvey Weinstein’s former studio to turn over records related to film projects he personally financed before the entertainment company filed for bankruptcy protection, WSJ Pro Bankruptcy reported. Judge Mary Walrath said that Weinstein is entitled to documents for projects he owns personally that weren’t among the larger lot of Weinstein Co. assets sold earlier this year to Lantern Capital Partners. The records the studio was ordered to produce yesterday are more limited than what Weinstein had been seeking.

Judge Approves Twin Cities Archdiocese Bankruptcy-Exit Plan

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After nearly four years in bankruptcy, the Roman Catholic Archdiocese of St. Paul and Minneapolis won final court approval of a chapter 11 plan that includes a $210 million settlement with hundreds of sexual-abuse victims, WSJ Pro Bankruptcy reported. During a hearing in Minneapolis, Judge Robert Kressel said he would sign off on the bankruptcy-exit plan, which was widely supported by victims who say they were sexually abused by the archdiocese’s clergy, often decades ago. The bankruptcy was initially marked by years of impasse and hard-fought legal battles but ended in a broad settlement between victims and the archdiocese. The settlement includes the archdiocese, about 450 abuse victims, roughly 180 parishes and 25 insurance carriers.

Fight Emerges over Whether Harvey Weinstein’s Studio Will Pay Him in Bankruptcy

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Harvey Weinstein says his former film studio, which collapsed into bankruptcy after multiple women accused him of sexual assault, owes him money, WSJ Pro Bankruptcy reported. Weinstein’s lawyers say Weinstein Co., the studio he co-founded, owes him missed payments for film and television productions he financed before the entertainment company filed for chapter 11, according to papers and email correspondence filed last week in the U.S. Bankruptcy Court in Delaware. Weinstein Co.’s assets were sold in July to private-equity firm Lantern Capital Partners for $289 million. Lawyers in charge of liquidating Weinstein Co. are now negotiating a plan to repay creditors, a group that includes vendors that did business with the company and women who have pending lawsuits accusing the studio of covering up Weinstein’s alleged sexual misconduct.

Weinstein Judge Tells Women to Refile Racketeering Lawsuit

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Harvey Weinstein’s former company urged a U.S. judge to throw out a racketeering lawsuit filed by six women who claim it helped hide the film producer’s sexual misconduct, Bloomberg News reported. U.S. District Judge Alvin Hellerstein in Manhattan seemed skeptical of some parts of the racketeering claim, such as accusations that company executives tampered with witnesses by preventing them from reporting Weinstein’s behavior. The judge told the women’s lawyers to refile the lawsuit with more specific allegations by the end of October. But the judge also questioned the defendants’ claim that the suit should be thrown out because they didn’t engage in sex trafficking, as alleged by the women, because at no time was sex traded for anything of value. Hellerstein noted Weinstein is accused of having swapped film roles for sex.
 

Defunct Charlotte Law School and Ex-Students Reach $2.7 Million Settlement

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Now-closed Charlotte School of Law will pay former students $2.65 million under a proposed class-action settlement, Law.com reported. The school and student plaintiffs on Tuesday asked a federal judge in North Carolina to preliminarily approve the class and the settlement, saying it was the best deal the students could hope to achieve given the dire financial circumstances of the shuttered school and its parent company, InfiLaw Corp. If approved, the class-action settlement would end four federal suits and 90 state court suits targeting the school. Charlotte School of Law ran a net $8 million deficit in 2017, the year it closed, according to the settlement motion. InfiLaw lost more than $7 million in 2017 and $6 million through June 2018, the motion said. The settlement consists of the $2.5 million left from the school’s insurance policy, as well as an additional $150,000 directly from InfiLaw.

Mike Isabella Restaurant Group Wins Approval to Pay Employees

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Celebrity chef Mike Isabella’s bankrupt restaurant group won court approval yesterday to pay employees while it reorganizes under chapter 11 protection, WSJ Pro Bankruptcy reported. Isabella put six of his Washington, D.C.-area restaurants under bankruptcy protection last week after negative publicity stemming from a sexual-harassment lawsuit caused revenue to drop over the course of a few months, according to bankruptcy-court papers. Four other restaurants have been permanently closed. Bankruptcy Judge Lori Simpson gave the company the green light to pay its employees, as well as pay its bills and keep its gift-card program going for the restaurants still in business. The bankruptcy filing includes six operating restaurants and a management company, which together employ 268 people. There are another 81 workers at two other restaurants who aren’t part of the bankruptcy filing, court papers show, so those workers’ wages weren’t subject to court approval yesterday.

ITT Bankruptcy Trustee Sues Lenders, Department of Education

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The bankruptcy trustee charged with cleaning up after failed for-profit schools operator ITT Educational Services Inc. is suing the U.S. Department of Education and financial backers of a private loan program, accusing them of helping ITT victimize students, WSJ Pro Bankruptcy reported. Trustee Deborah J. Caruso says an assortment of financial institutions helped ITT through a loan program that allegedly preyed on low-income students who were considered credit risks. As for federal regulators, Caruso says that the Education Department knew ITT’s business was in trouble but looked out for its own financial interests, adding to the problem of students stuck with big student loan payments and flawed degrees. The bankruptcy trustee’s arguments surfaced Friday in lawsuits filed in a bankruptcy court in Indianapolis, where ITT collapsed almost two years ago. The lawsuits are part of the trustee’s effort to find cash to pay some $1.5 billion in claims from students, teachers and suppliers left in a lurch by ITT’s abrupt shutdown.

SEC Reaches Financial Settlements With Ex-Dewey & LeBoeuf Leaders

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Steven Davis, a former chairman of Dewey & LeBoeuf, has agreed to pay a $130,000 civil penalty in a settlement with the U.S. Securities and Exchange Commission, according to newly filed court papers, the largest fine so far to come out of the SEC’s case against five leaders of the now-defunct firm, The American Lawyer reported. The SEC filed court papers Aug. 31 laying out the details of Davis’ settlement, as well as the settlements with ex-finance director Francis Canellas, who has agreed to pay $43,178 in disgorgement and interest; and former Dewey controller Thomas Mullikin, who has agreed to pay $8,635.78 in disgorgement and interest costs. If the settlements are approved by the court, the SEC will have wrung out of Dewey leaders about $216,815, including its settlement with former Dewey executive director Stephen DiCarmine. That deal, including a $35,000 civil penalty, was revealed earlier this year.

California Lawmakers Pass Bill on PG&E Wildfire Liability

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California’s legislature passed a bill late on Friday that could help the utility Pacific Gas and Electric Corporation (PG&E) avoid potentially crippling liabilities for wildfires that ravaged northern parts of the San Francisco Bay Area last year, Reuters reported. The bill, passed 29 to 4 in the Senate and 45 to 10 in the Assembly, requires approval by Democrat Governor Jerry Brown. Some fires in the north of the Bay area were caused by trees toppling into or making contact with PG&E power lines, a report released by state officials in June said. Analysts estimate PG&E, the state’s biggest utility, could face several billions of dollars in liability as a result. Democrat State Senator Bill Dodd said the bill was needed to spare customers from big increases in energy costs. “Without it, ratepayers will be left holding the bag and communities will needlessly suffer,” he said.

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