(CN) – The film company co-founded by disgraced former producer Harvey Weinstein filed for Chapter 11 bankruptcy Monday.
More than 80 women have come forward in the last five months to accuse Weinstein of a decades-long pattern of sexual harassment and assault, but a provision of the bankruptcy filings in Delaware could clear the way for yet more allegations.
Voiding nondisclosure agreements that various women signed as part of settlements with The Weinstein Company, bankruptcy protection sheds the company of its namesake’s so-called “secret weapon.”
“No one should be afraid to speak out or coerced to stay quiet,” the Weinstein Company said in a statement Monday.
While unable to undo the damage it attributed to Harvey Weinstein, who has denied any wrongdoing, the company said it “hopes that today’s events will mark a new beginning.”
Lantern Capital put in what is known as a “stalking horse” first bid of $310 million for the company, which is still controlled by co-founder Bob Weinstein, Harvey’s brother. Other companies will still be able to bid.
Jeffrey A. Sonnenfeld, a dean at the Yale School of Management, said the allegations against Harvey Weinstein were not the company’s only problem.
“I don’t want to diminish the focus on conduct here,” Sonnenfeld said in a phone interview Tuesday. “The conduct is so salient and so overwhelmingly atrocious. However, the rest of the story is the bad corporate governance, structure and process. This is not a board that was chock-full of good governance advocates to start with.”
New York State Attorney General Eric Schneiderman noted in a statement that The Weinstein’s Co.’s bankruptcy will not keep the company or the Weinstein brothers from facing a civil rights lawsuit he brought against them in February.
“This is a watershed moment for efforts to address the corrosive effects of sexual misconduct in the workplace,” Schneiderman said in a statement Monday, adding the revocation of the nondisclosure agreements “will finally enable voices that have for too long been muzzled to be heard.”
Also Monday, New York Governor Andrew Cuomo announced an investigation of how allegations against Harvey Weinstein were handled by Manhattan District Attorney Cy Vance Jr., who accepted campaign contributions from Weinstein’s attorney.
The Weinstein Co. is represented in the bankruptcy petition by Mark Collins of Richards, Layton & Finger. The Wilmington, Del., attorney did not respond to a request for comment Tuesday.
Sommenfeld said the Weinstein Co.’s bankruptcy, while not an utter surprise, might serve as a warning to others.
“The demise of The Weinstein Companies shows the poisonous effect of such misconduct,” he said.
“We now have generations of employees, consumers and owners who don’t want to be associated with that kind of conduct,” Sommenfeld added.
Weinstein and his bankrupt company face multiple lawsuits related to the scandal. The beleaguered producer has retained New York defense attorney Benjamin Brafman, who also previously defended “Pharma Bro” Martin Shkreli as well as Michael Jackson, Sean Combs and Mafia boss Salvatore Gravano.
Founded by the Weinstein brothers in 2005, The Weinstein Co.’s film archive has received 23 Academy Awards. The bankruptcy filing notes that most of the company’s assets lie in intellectual property, distribution rights and “cash flows related to its film library.”
The Weinstein brothers also founded Miramax Films in 1979, the company responsible for blockbusters like “Pulp Fiction” and “Gangs of New York.”