Final Case Be.
THE CASTING COUCH IN THE GLARE OF THE SPOTLIGHT
On Sunday October 8, 2017, the Weinstein Company fired its co-founder Harvey Weinstein after an investigation by the New York Times uncovered allegations that he had engaged in rampant sexual harassment and possibly assault and rape. Mr. Weinstein was a renowned movie producer who had shaped the future of the American film industry and moved in the rarified air of national politics as an accomplished fundraiser. Mr. Weinstein had that rare kind of industry power which could make or break a movie or an actresses career. Mr. Weinstein has not helped his on cause as he has swung wildly between his own contrition and attacking his alleged accusers. In an era of social media, these accusations have added fuel to the #Me Too movement which focuses the spotlight on sexual harassment and assault in Hollywood, the private sector and government. For his part Mr. Weinstein is quoted as denying many of the allegations as patently false. Many is an interesting choice of words as it has now come to light that there are over thirty female accusers, many of whom were young and propositioned with the lure of a role in one of his movies won many Oscars and made their leading ladies A-list stars in Hollywood.
How did this objectionable behavior remain in the dark for over three decades? There was obviously complicity on the part of those around Mr. Weinstein who keep quiet to maintain their own careers and respective gravy trains.
Harvey Weinstein built his complicity machine out of the witting, the unwitting and those in between. He commanded enablers, silencers and spies, warning others who discovered his secrets to say nothing. He courted those who could provide the money or prestige to enhance his reputation as well as his power to intimidate.1
So how did this complicity machine actually operate in practice as Mr. Weinstein attempted to tamp down the raging fires springing up from numerous accusers finding strength in numbers as more and more women begin to tell their stories.
He gathered ammunition, sometimes helped by the editor of The National Enquirer, who had dispatched reporters to find information that could undermine accusers. He turned to old allies, asking a partner in Creative Artists Agency, one of Hollywood’s premier talent shops, to broker a meeting with a C.A.A. client, Ronan Farrow, who was reporting on Mr. Weinstein. He tried to dispense favors: While seeking to stop the actress Rose McGowan from writing in a memoir that he had sexually assaulted her, he tried to arrange a $50,000 payment to her former manager and throw new business to a literary agent advising Ms. McGowan. The agent, Lacy Lynch, replied to him in an email: “No one understands smart, intellectual and commercial like HW.”2
As the gossip and innuendo spread, agents continued to send actresses to meet Mr. Weinstein alone in hotel rooms, warning them if anything happened they should stay quiet if they knew what was good for them. It seems Harvey Weinstein was the best game in town and sometimes the only game in town. Mr. Weinstein used both threats and enticements of access to hold off the press while his brother and partner, Bob Weinstein, participated in payments to those who claimed sexual molestation going back to 1990. Now Mr. Weinstein, 65, is under investigation by law enforcement authorities in three separate cities.
A master of leverage, Mr. Weinstein parlayed his films into relationships across the worlds of entertainment, politics, publishing and beyond, achieving a stature that at times proved useful in intimidating others and protecting himself. “I know the president of the United States. Who do you know?” Mr. Weinstein, a Democratic fund-raiser, would say during the years Barack Obama was in the White House, adding expletives. “I’m Harvey Weinstein,” he used to say.
“You know what I can do.”3
Talent agencies in Hollywood are for the most part, male institutions and tended to keep quiet like a good ole boys network who looked the other way when problems surfaced. Agents typically sign their clients when they are at their highest value to the industry, young and a fresh face. This is also the time when they are most vulnerable given their youth and inexperience in life, a perfect hunting ground for a sexual predator like Harvey Weinstein. By the Weinstein brothers left Miramax which were bankrolled by the Disney Companies to form their own company in 2004, dozens of women including Angelina Jolie, Angie Everhart, Ashley Judd, Cara Delevingne, Rose McGowan, Gwyenth Paltrow, Heather Graham, Kate Beckinsale and many others. The agents motivation to keep quiet about what their clients were subjected to was the fact that they indirectly earned their living from executives like Mr. Weinstein, who write their paychecks.
In February 2018, N.Y. Attorney General Eric T. Schneiderman filed a lawsuit against the Weinstein Company for the toxic environment it had created in acquiescing to Mr. Weinsteins Sexual Predation. The timing of this filing was explained as necessary to protect the compensation owed the victims and Weinstein employees from the perpetrators and enablers using the assets to enrich themselves. The problem with this is that it upended a deal to sell the company to group of investors led by Maria Contreras-Sweet, who had said she planned to set aside at least $50 million for a victims fund and start a new female-led movie studio. This does not seem the best way to help these victims because if the sale does not go through, the Weinstein Company will be forced into Chapter 11 bankruptcy proceedings which could eliminate any claims of the victims as unsecured creditors.
Question Number One: Is there enough money? said Kenneth Feinberg, the lawyer who administered funds for the victims of the Sept. 11 terror attacks, the BP oil spill and the faulty ignition switch at General Motors. That, is always the single most important issue when trying to redress victims.4
Gloria Allred the celebrity attorney in Los Angeles who is representing many of the victims, worries that bankruptcy proceedings would not leave any funds available for the victims compensation. It should also be noted that if Ms. Allred decided to sue the company, her clients have a better chance of being compensated if the company remains viable. She also has a personal incentive as her contingency fee would be one-third of any funds received by her clients.
Twice there have been attempts to sell the assets of the company but those attempts have fallen through in the due diligence stages. A group organized by Ron Burkle and led by Maria Contreras-Sweet said it called off a deal for most of the film and TV studio’s assets less than a week after saying it would buy them by assuming $225 million of debt. The group planned to invest $275 million to relaunch Weinstein Co. with a new name.
“We have received disappointing information about the viability of completing this transaction,” Ms. Contreras-Sweet said in a statement. A person familiar with the group said it had found about $65 million of additional liabilities.5
It has been said that a crisis is a terrible thing to waste and the Weinstein executives have used this crisis as an opportunity to raid the piggybank. A month before the public revelations of his sexual misconduct hit the papers, Harvey Weinstein borrowed $1 million from the company that bears his name to keep company with the $3 million he had paid himself over the past six months. Additionally the company paid off $2 million of personal debt guaranteed by Mr. Weinstein. Not to be out done, Bob Weinstein took nearly $6 million in compensation and other payments, while the company’s former chief operating officer David Glasser, took more than $4 million in the previous year according to papers filed in the U.S. Bankruptcy Court. While it is possible some of this can be clawed back in bankruptcy, there is no guarantee that a sale of the remaining assets will leave any funds after satisfying the secured creditors. Unsecured creditors such as the victims of Harveys casting couch will most probably get nothing but the right to file a civil lawsuit.
The question we must ask now is where this will all lead in the future? Jenni Konner an executive producer of the HBO series Girls sees this as a tipping point. This is the moment we look back on and say thats when it all started to change This is going to scare any man in Hollywood using his power for anything but making movies and television.6
As the #me too movement has surged into the national discourse, other predators in the entertainment, journalism, corporate and political arenas have been sweep up like so much flotsam in an ever rising tide. Are we at the end of the news cycle or just the very beginning of a sordid saga that has yet to be fully revealed under the harsh glare of the spotlight?
1) Twohey, Megan; Kantor, Jodi; Dominus, Susan; Rutenberg, Jim; Eder, Steve Feeding the Complicity Machine, 06 Dec 2017, New York Times Late Edition, New York, NY
4) Sorkin, Andrew Ross Does the Lawsuit Now Help the Victims 12 Feb 2018, New York Times Online Edition, New York, NY
5) Fritz, Ben; Hagey, Keach; Randles, Jonathan Weinstein Deal Called Off 07 Mar 2018, Wall Street Journal, Eastern Edition
6) Twohey, Megan; Kantor, Jodi; Dominus, Susan; Rutenberg, Jim; Eder, Steve Feeding the Complicity Machine, 06 Dec 2017, New York Times Late Edition, New York, NY
Guidelines for Analyzing Cases
Problem and Issue Identification
1. What are the central facts of the case? What assumptions are you making about these facts?
2. What is the major overriding issue in the case? What major question or issues does this case address that merits study at this point in the course?
3. What sub-issues or related issues are present in the case that merit consideration now?
Analysis and Evaluation
1. Who are the stakeholders in the case and what are their stakes? What challenges, threats or opportunities are posed by these stakeholders?
2. What economic, legal, ethical, and philanthropic responsibilities does the company have, and what is the nature and extent of these responsibilities?
3. If the case involves company actions, evaluate what the company did or did not do in handling the issue affecting it.
1. What recommendations do you have for this case? If a company’s strategies or actions are involved, should the company have acted as it did? What action should the company take now? Why? Be as specific as possible. List several options as well as the pros and cons of each alternative. Be prepared to discuss why you eliminated those options you discarded and defend your chosen alternative. Mention and discuss any important implementation considerations. This last step is crucial because recommendations that cannot be implemented are worthless.
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