Judge delays Bergstein motions
Federal bankruptcy court in no rush to agree to demandsMovie exec David Bergstein is on the offensive against a creditor's efforts to force five of his companies into insolvency, but federal bankruptcy court Judge Barry Russell is in no rush to agree to his demands.
On Friday, the judge sided with a creditor when he issued an order putting off until Oct. 6 a hearing on Bergstein's motion to force Aramid to put up a $25 million bond in case it loses and has to pay damages. While Russell did not quash the motion outright, he agreed to a request by Screen Capital International -- a creditor run by David Molner, who also works with Aramid -- for the unusually long delay, which should be enough time to determine the ultimate course of the case.
The judge also put off until July 28 another motion that would allow Bergstein to operate the five businesses as he normally does. Bergstein's attorney had filed motions showing that his businesses, including Pangea Media, have been devastated by the legal action and are almost unable to function as clients, customers and creditors await the outcome of the case.
There are other legal issues still hanging, including whether Bergstein, his assistant and his sometime business partner Ronald Tutor will have to give depositions in the case and provide extensive documents. That likely will be decided July 20 in Russell's Los Angeles courtroom in what promises to an important showdown in the case.
Meanwhile, the forensic accountant investigating the involuntary bankruptcy case brought by creditors against Bergstein has laid out to the court details of being stymied in efforts to do his job.
The report's conclusion: Bergstein, Tutor and others under their command "are not cooperating" with efforts by interim trustee Ronald Durkin "to identify and administer the assets" of ThinkFilm and four other entities that are in the legal action. Broken promises and a blizzard of litigation have made things worse.
The report, filed Thursday, says Bergstein has conditioned cooperation on the trustee making commitments in advance about how he will administer the assets and records that are disclosed. The trustee says it can't work that way.
The report also says Bergstein promised he would provide an inventory of assets and records that the trustee wants to see but that "nearly two months have passed, and Mr. Bergstein has yet to provide the promised inventory or to permit himself to be examined under oath."
On Wednesday, Bergstein told THR that he too is frustrated because Durkin has refused repeated requests to provide him with a "protocol" that would define exactly what areas he can be questioned about and what records he must present at his deposition.
Bergstein said that the five companies controlled by the court are only part of his business empire and that he wants to make sure he doesn't have to disclose information about those entities not part of the involuntary bankruptcy.
The legal battle began March 17 when Russell issued the rare and unusual order to start the involuntary bankruptcy proceedings.