Call him notorious

ThinkFilm's Bergstein on Hollywood's hot seat

He's been called an unabashed Hollywood hustler. Sordid tales of unpaid vendors, lawsuits, layoffs and movie shutdowns have dogged him in the 18 months since he took over distributor ThinkFilm and foreign sales agent Capitol Film.

Yet David Bergstein is unperturbed.

"There is always an adjective that precedes us: beleaguered, financially distressed," Bergstein said during a recent interview held from his plush new offices in the Fox Plaza in Century City. "And none of these people know anything."

What is known is that after a summer in which ThinkFilm has been battered by bad press — especially during the repeated shutdowns of the Jake Gyllenhaal satire "Nailed," financed by a Bergstein-backed entity — the film executive is looking for cash.

Whether he can raise capital and stay in business — and perhaps repair his strained relationships around town in the process — remains to be seen. But Bergstein is adamant that he's on the right track.

"Our business plan is not so much about the movie business," he said, noting that he controls about a thousand films. "It's really to build a global digital distribution business."

Bergstein began to make a mark in Hollywood 18 months ago when he and construction magnate Ron Tutor bought ThinkFilm and London-based Capitol. Yet after releasing 20-odd pictures in 2006 and 2007, only nine ThinkFilm movies have opened this year.

Bergstein apparently has sold off some films, canceled others and refused to commit to release dates for the other two films originally scheduled for 2008: Sundance pickups "Phoebe in Wonderland" and "The Escapist."

At the same time, at least four lawsuits have been filed against ThinkFilm by vendors and others claiming they got the short shrift.

"Some of what is out there is true," Bergstein said, with a hint of an accent from his native New York. "The vast majority is not true. And for the stuff that is true, my answer is, 'So what? So what if X, Y or Z might be owed money?' "

That attitude has some in the creative community fuming.

"He's the biggest disgrace in the film business," said producer Albie Hecht, the former president of Nickelodeon who produced the Oscar-nominated ThinkFilm documentary "War/Dance" and claims he still has not seen the small advance ThinkFilm promised. An arbitration is pending.

Alex Gibney, director of the Oscar-winning ThinkFilm documentary "Taxi to the Dark Side," charges in a lawsuit that ThinkFilm did not have the financial resources to properly release his film and fraudulently concealed this fact from the film's creative team, its investors and the film's sales agent, Cinetic Media.

Bergstein claims Gibney was paid everything he was owed, including a $50,000 Oscar bonus.

He also downplayed suits by Allied Advertising, which seeks $4.2 million for ads it placed, and Mammoth Advertising, which said it has $430,000 in unpaid bills.

Lawsuits are just part of doing business, said Bergstein, whose office is stacked with boxes of files and a framed photo of John Lennon flashing a peace sign. He made a small fortune acquiring depreciated assets, cutting costs and selling for a profit, then dived into the film business in 2003 via his acquisition of Elie Samaha's Franchise Pictures library.

"He is used to going in, buying something for two cents that's normally four cents and then saying to everyone, 'It's a distressed asset. I'm only going to pay you half of what you deserve,' " said a talent manager and producer who has worked with Bergstein.

Bergstein acknowledged he's had problems paying such creditors as PR companies and production services, but he said those were caused by the move of ThinkFilm's headquarters from Canada to the U.S., which required new accounting and tracking systems.

A spokesman for investment bank DB Zwirn & Co. said it has about $100 million in loans to ThinkFilm's umbrella company. Bergstein said he has been able to find funds to replace that facility from Comerica Bank and others. He said he has brought ThinkFilm's debts from $30 million to $8 million and is pumping in another $25 million to market ThinkFilm releases on top of a total investment of $400 million for all his entertainment businesses, which include a postproduction facility and music publisher in London. He declined to say where that new money will come from.

Bergstein said ThinkFilm was insolvent when he bought it. Jeff Sackman, who co-founded the company in 2001 and angrily quit in April, said it was profitable for four of its first five years but looked for a buyer two years ago when art house attendance dipped.

"We were very cooperative at first," Sackman said of Bergstein.

At Bergstein's urging, ThinkFilm went on a buying spree, acquiring films like "In the Shadow of the Moon," which it bought for $2.5 million at Sundance in 2007 but which grossed only $1.1 million in theaters that November. Indeed, only four films out of more than 30 releases during the past two years have grossed more than $1 million, including Sidney Lumet's "Before the Devil Knows You're Dead," which grossed $7 million last fall.

Many planned ThinkFilm releases are now in limbo. Another, "The Last Confederate: The True Story of Robert Adams," was briefly released a year ago but producer Julian Adams said he has been unable to get a financial statement from Bergstein.

"I can't even describe the heartache," Adams said. "I'm beyond frustrated with it."

Bergstein's highest-profile production is the $30 million "Nailed," directed by David O. Russell, which was shut down by the guilds several times this summer over money woes.

Bergstein said those guild problems have been resolved and that the movie only needs two days of pickup shots; others said crucial scenes are missing. In any case, the film will now apparently arrive on schedule in early 2009.

Taylor Hackford, who is in post on ThinkFilm's "Love Ranch," starring his wife Helen Mirren, said funding for his film came through "just in time. The fact is he stayed with us," Hackford said of Bergstein. "We never shut down for a day. Everybody got paid."

Other Bergstein-backed movies nearing completion include the road comedy "Five Dollars a Day" and the crime drama "Black Water Transit." It's unclear what effect, if any, ThinkFilm's apparent woes will have on these productions.

One agent said he feels sorry for ThinkFilm president Mark Urman, who must field calls from irate filmmakers.

"Bergstein didn't care about the budgets of movies. He just did them. It was like almost a three-card Monte game. Monies were moving in all different places to meet the latest fire drill, and at some point the cards stop and there is no money," the agent said.

Bergstein angrily denied rumors that the company is firing employees, withholding paychecks and stiffing profit participants.

His plans for ThinkFilm are much larger than anyone realizes, he stressed.

Theatrical distribution and foreign sales platforms are only a means in which to gather content before the industry transitions to selling directly to consumers via digital. Then the key will be to own the most content, so despite all the naysayers, he plans to acquire even more movie and TV libraries.

In the meantime, Bergstein said ThinkFilm's finances are "solid" and the company will continue to release films.

But Sackman said that what has happened at the company he co-founded breaks his heart. "I am very proud of what we built and accomplished at ThinkFilm," he said. "And very sad to see how in the past months the company and its reputation have been diminished." (partialdiff)
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