Bergstein seeks to stop forced deposition

1:53 PM PST 06/04/2010 by Alex Ben Block, AP

Also negotiating, along with Ronald Tutor, to acquire Miramax

An attorney for David Bergstein has filed an objection to stop the federal bankruptcy court trustee from forcing his client to give a deposition, produce additional documents and/or allow files in his computer and that of his assistant to be examined.

Separately, Bergstein and his business partner Ronald Tutor have entered into an exclusive negotiating period with the Walt Disney Co. to acquire Miramax Films and its library of 611 movie and TV titles, according to a report Friday in the L.A. Times.

Bergstein is officially an adviser on the Miramax acquisition to Tutor, who also heads one of the largest construction companies in the world and is said to be financing the proposed $650 million-plus deal along with two entities outside the U.S. who have not been publicly identified.

Bergstein previously told THR that they not only bid $650 million, but also would go up to $700 million, Disney's original target price, if Disney would include "Gnomeo and Juliet," an animated movie in which Emily Blunt and James McAvoy voice the title characters. Disney has reportedly chosen to keep that movie and release it themselves at a future time.

Bergstein also told THR several weeks ago that Disney had examined his backers and determined they had the money to do the deal, so that was not an issue. Bergstein said besides Tutor, the other two backers are "offshore" entities, which he declined to name until a deal is done.

Bergstein and Tutor did not return calls seeking comment Friday prior to publication.

That Disney is moving forward with the Tutor bid is a surprise by some in Hollywood because of Bergstein's many highly publicized legal battles, which include not just the bankruptcy court case but literally dozens of other lawsuits.

The federal bankruptcy case was started March 17 when a group of 14 creditors (since joined by a dozen others) sought to put five companies controlled by Bergstein into involuntary bankruptcy. Although that was very unusual, Judge Barry Russell agreed and subsequently appointed forensic accountant Ronald Durkin as interim trustee to oversee Bergstein's companies and examine his books, records and businesses.

On and off over several weeks, Durkin was in Bergstein's offices and did look at records and copy files off computers. However, Bergstein refused to allow him to copy files from his personal computer, which he also uses for business, or that of his assistant Frymi Biedak, who also acts as his bookkeeper, according to Durkin's filling and declarations by former employees.

Last week Durkin filed asking the court to order Bergstein to sit for an interview under oath on June 15 and beyond (as long as it takes) as well as produce a number of other documents. In that filing, Durkin said that Tutor also refused to be interviewed.

The filing on Thursday by Bergstein's attorney David R. Weinstein says the judge should not grant Durkin's request because Durkin's attorney Leonard L. Gumport has refused to confer in advance of the deposition concerning what the filing calls "substantive and other procedural issues." Weinstein also complains Bergstein is being asked to produce "extraordinarily voluminous documents."

Weinstein also wants to discuss in advance of any deposition questions about violations of attorney-client privilege, apparently a reference to an ongoing legal battle with Susan Tregub, who was Bergstein's longtime attorney but now is advising the creditors who have brought the bankruptcy action. Tregub so far has not been able to move that case from state to federal court as part of the bankruptcy. But Bergstein's side has also been stymied in efforts to get the state court to side with most of their claims.

In the case of Miramax, a Disney spokeswoman did not return calls for comment, but apparently has chosen to deal with Tutor and Bergstein because they have offered the most money for the Miramax name and library. Last week a bid by Ronald Burkle backed by Harvey and Bob Weinstein and the Weinstein Co. hit a wall when Burkle at the last minute decided to lower his bid from about $650 million to about $575 million. The Burkle-Weinstein bid appears dead.

Disney also has a bid for Miramax from the Gores brothers for a reported $600 million, which is now put on hold.

Whoever does win Miramax will still have to deal with the Weinsteins. At the time they left Miramax nearly four years ago, they still had agreements which require their participation or approval to remake certain movies. There are about 14 titles that come under that agreement, which represent the most important titles in the library such as "Scream" and "Scary Movie."
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