Weinstein Company Bankruptcy Ends NDAs

By William Vogeler, Esq. on March 26, 2018 | Last updated on March 21, 2019

In what may be Hollywood's worst movie, the Harvey Weinstein story is almost over.

After the sex scandal broke out last year, the celebrity world cleaned out it's dirty closet with seemingly endless tales of sexual misconduct. The list of "Weinsteins" grew from Hollywood to Las Vegas and beyond.

Perhaps those stories will never end. But the Weinstein Company is done, having met its inevitable end in bankruptcy court. Then something unexpected happened.

The Offensive Conduct

As more than 70 women came forward to accuse the company's co-founder of sexual misconduct, it became clear that Hollywood had buried the stories for years. Many of the victims had signed non-disclosure agreements.

The company fired Weinstein, but could not survive the scandal. In the bankruptcy filing, Lantern Capital Partners has offered to buy the company's assets but wants nothing to do with the NDAs.

"Since October, it has been reported that Harvey Weinstein used non-disclosure agreements as a secret weapon to silence his accusers," Lantern said. "Effective immediately, those 'agreements' end."

The company expressly released "any confidentiality provision to the extent it has prevented individuals who suffered or witnessed any form of sexual misconduct by Harvey Weinstein from telling their stories."

The Offensive Contract

It was an unexpected move from Lantern and it was not required for the bankruptcy filing. But it acknowledges that employers and their lawyers are partly blame for the Weinstein effect.

Rose McGowan, who opened the flood gates when she alleged Weinstein raped her, said she signed an NDA in 1997. Decades later, she broke her silence and the contract.

The #MeToo movement, and the end of the Weinstein Company, are fair warning to lawyers that nondisclosure agreements cannot hide every dirty secret.

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