The Weinstein Company has been hit with a $130 million fraud lawsuit for allegedly swindling Genius Products LLC — a defunct home video distributor that counted TWC as a 70 percent stakeholder.
Genius, embroiled in Chapter 7 proceedings since 2011, claims they entered into “onerous and one-sided” agreements that blatantly favored the studio run by moguls Harvey and Bob Weinstein.
Though the company was established as independent, documents filed in California bankruptcy court claim limited back-end percentages on Weinstein releases, among other decisions, resulted in the corporation’s financial peril.
Genius, which had clients like World Wrestling Entertainment and ESPN, also claim they were falsely established by TWC as in independent corporation with expectations to turn profit, but were never enabled due to debt transfers between both companies.
“We think the Trustee’s claims are gravely mistaken and will not succeed. The story the Trustee wants to tell simply is not what happened and does not square with the facts,” said attorney Alan Friedman on behalf of the Weinstein Company.
“The agreements that the Trustee complains about were negotiated at arm’s length. The Weinstein Company was not on both sides of the negotiations. This is a matter of fact that cannot be disputed.”
Weinstein has not yet been served the complaint, an individual close to the suit told TheWrap. Attorneys for Genius have not yet returned requests for comment. Full damages sought total nearly $130.46 million.
Pamela Chelin contributed to this report.