Having seen this multiple times before[1] I think a lot of time it’s partly embarrassment and partly acting on bad legal advice because they kinda know about it and have been turning a blind eye. The legal advice is bad as well as immoral because the coverup is only going to make any liability worse.

[1] including one where it was an open secret but the guy was pretty powerful in his world. He’s in jail for rape now so make of that what you will.