When many are considering or filing for bankruptcy, they often are concerned about whether their specific debts can be wiped out during the process. They look at their mounting credit card or medical debts and wonder if they can truly get a fresh financial start. And, for those concerned about this, a recent Hollywood bankruptcy case has shown that even debts one may otherwise think of as non-dischargeable may, in fact, be dischargeable.
Even Hollywood deal making cannot stop bankruptcy
While many likely remember the downfall of Harvey Weinstein, they likely do not know about his media company’s $289 million bankruptcy filing from 2019. His company, Spyglass Media (then called Lantern), claimed that they bankruptcy should wipe the debts from contract owned for successful films and TV shows. These included celebrities Bradley Cooper, Jennifer Lawrence, and Julia Roberts, among others.
The case examined the distinction between a covenant and termination provision. The court found that the federal Bankruptcy Code eliminated the then-existing debt obligations, like back-end production deals. Indeed, the bankruptcy court eliminated the obligation to pay a producer over $400,000 the company owed for a percentage of net profits on a successful film, the Silver Linings Playbook. Of course, future obligations would still need to be paid from profits, but the existing and prior debts were extinguished by the bankruptcy filing.
Filing for bankruptcy
For Siverdale, Washington, residents struggling with debt, bankruptcy can help. This case shows just how far debt discharge laws go. The bankruptcy code is designed to help debtors get a fresh financial start. Though, to begin the process, one needs