Katz, Marshall & Banks partner Debra Katz was interviewed on KPCC Radio’s The Frame about the New York Times report that Harvey Weinstein is close to settling scores of lawsuits against him for $25 million – none of which will actually be paid by him.
As Ms. Katz explains, large companies often purchase “Directors and Officers Insurance,” which covers losses due to high-level misconduct, and “Employers’ Liability Insurance,” which protects against discrimination lawsuits brought by employees. In cases of corporate fraud or intentional misconduct, insurance companies can often reserve coverage. However, it is reported that The Weinstein Company’s policy will cover a multi-million dollar settlement with dozens of Weinstein’s accusers.
According to Ms. Katz, it became clear to the attorneys representing the accusers that there was “less money available the more time went on,” and the threat of Weinstein declaring personal bankruptcy meant that this was the best deal that would be available to provide Weinstein’s victims with at least some compensation for the immeasurable harm they suffered.
Weinstein will soon face a criminal trial in New York. His civil settlement included no admission of wrongdoing.
Listen to the interview here (beginning at 0:45).