Harvey Weinstein.

A lawsuit from New York Attorney General Eric Schneiderman has threatened to upend the sale of the Weinstein Co. in a bid to ensure that victims of Harvey Weinstein's alleged sexual abuse are compensated.

But what wasn't clear was how the impact of Schneiderman's lawsuit could reshape litigation stemming from the disgraced film producer's actions, corporate law experts said on Monday.

The lawsuit, filed Sunday night in New York Supreme Court, accused Weinstein Co. and its founders, Harvey and Bob Weinstein, of civil and human rights abuses, using a broad section of New York law that authorizes the state to file suit against a company for “fraudulent or illegal acts” perpetrated against its citizens.

In a statement, the attorney general's office said the timing of the suit was due in part to the “reported imminent sale” of the firm, which it said could result in a windfall for the Weinstein Co. directors and officers who failed to protect the firm's employees from Harvey Weinstein's misconduct.

“As alleged in our complaint, the Weinstein Co. repeatedly broke New York law by failing to protect its employees from pervasive sexual harassment, intimidation, and discrimination,” Schneiderman said.

“Any sale of The Weinstein Company must ensure that victims will be compensated, employees will be protected going forward, and that neither perpetrators nor enablers will be unjustly enriched. Every New Yorker has a right to a workplace free of sexual harassment, intimidation, and fear,” he said.

The litigation was seen Monday as directly targeting the proposed $500 million asset sale of the Weinstein Co. to a group led by Maria Contreras-Sweet, which included the assumption of some of the company's debt. According to the Wall Street Journal, which first reported the deal, Contreras-Sweet canceled the transaction in the hours after the lawsuit was filed.

“This is not a commonly used tactic by the attorney general,” said Eric Talley, a professor at Columbia Law School who specializes in corporate governance and finance.

“The idea is to use as much leverage as [Schneiderman] can to find that money at as upstream a position as possible,” in order to keep it from flowing to the Weinstein brothers or other board members, Talley said.

Experts interviewed for this report said the lawsuit shows that Schneiderman is likely positioning himself to negotiate on behalf of a growing number of Weinstein's victims who have pressed claims against either Harvey Weinstein or the company, either individually or in a proposed class action filed in New York.

However, the move did not come without risk.

Talley said the looming threat of liability could scare off other potential buyers looking to capitalize on the Weinstein Co.'s catalog of films and its television business. That, in turn, could drive down the value of the company and the amount of assets that would be available for distribution among Weinstein's accusers, he said.

“There is a potential downside, it seems to me, to this type of action,” Talley said. “It's more leverage but it's leverage over a shrinking pot.”

The lawsuit, and the scuttled sale, also raised the specter of a bankruptcy filing, if potential buyers were to walk away from a potential transaction altogether. In that case, litigation would slow, and it would likely be up to a judge to decide the relative order of the company's creditors and plaintiffs, states and shareholders seeking payment from corporate assets.

“Bankruptcy could jeopardize the amount of money that's available for victims,” said Jill E. Fisch, a business law professor at the University of Pennsylvania Law School.

Still, Schneiderman's lawsuit potentially clears the way for a settlement where the proceeds of a sale would go to a fund to compensate Harvey Weinstein's victims, with the remainder going to Weinstein Co. shareholders.

A settlement then would replace an escrow account that Contreras-Sweet said her planned deal provided for victim compensation with a “state-administered” slush fund with a larger pool of money to draw from, Talley said.

Attorneys also confirmed that Weinstein Co. board members could potentially be vulnerable to derivative litigation in Delaware if shareholders receive just a fraction of their investment in the company. Under the Caremark theory,  investors could argue that the firm's directors should assume personal liability for corporate harm on the basis that they were aware of a systemic problem but failed to act.

However, the prospects for derivative litigation remain muddy given the Weinstein Co.'s status as a privately held firm. And any filings would likely be dependent on the fate of the company itself.

“You'd only be expected to see that after the dust settles,” Talley said.

For now, all eyes will be on Schneiderman, as he decides how to proceed in New York, Fisch said.

“Is New York going to let private parties navigate how [the Weinstein Co.'s] value is divided,” she said, “or is Schneiderman going to play a role?”

“Otherwise, what is the point of a civil rights lawsuit?”