Trustee forcing Bergstein to provide info
Motions filed in bankruptcy court by Ronald DurkinFrustrated by a lack of cooperation, the trustee overseeing five companies controlled by David Bergstein has filed motions in federal bankruptcy court to force Bergstein to sit for an interview and provide access to his personal computer.
Interim Chapter 11 trustee Ronald Durkin related in the legal filing Tuesday in Los Angeles that Bergstein has not kept his promises to provide complete records for the companies, which include ThinkFilm and Capitol Film Development, and has insisted on bargaining in return for full cooperation and agreeing to be deposed under oath for what is known as a Rule 2004 examination.
"Bergstein will not voluntarily submit to a Rule 2004 examination," Durkin wrote. "He may dispute that assertion, but it is a fact. ... Bergstein does not have the right to postpone his sworn examination by the interim trustee."
Among other revelations in the filing, Bergstein has not personally filed income taxes for the past three years and "purports to be unable to produce tax filings for any of the (companies named in the bankruptcy suit)."
Bergstein's partner in many of his show business ventures, Ronald Tutor, who also heads one of the largest U.S. construction firms, Tutor Perini, also has refused to be deposed under oath.
Durkin also said that most of the assets of the companies in the bankruptcy action were moved to other companies controlled by Bergstein before the filing, so to get to the truth of what has happened to those assets, he must see those records as well.
"Bergstein has withheld financial records, including records on Bergstein's own office computer," Durkin wrote.
Durkin wants the court to order Bergstein to appear for an in-depth deposition beginning June 15 and continuing as long as it takes to get what he seeks. The filing includes a long list of documents, records and information Bergstein is to provide.
Durkin also wants full access to the computers used personally by Bergstein and his assistant/bookkeeper, Frymi Biedak, that until now has not been granted. Bergstein did allow Durkin to "image" (copy files from) other office computers.
Bergstein did not return a call for comment Wednesday, but in the past he has said the computers he and Biedak use are personal property and contain confidential memos and personal records he does not believe anyone else has a right to see.
"The importance of these office computers is evident," Durkin wrote. "Bergstein and Biedak played key roles in whatever records of cash receipts and disbursements were kept and in allegedly making a 'sweep' of incoming revenues."
Durkin said that millions of dollars were moved among various accounts, but he has not been provided records to determine where it went.
In a court hearing Tuesday at the downtown Los Angeles U.S. Bankruptcy Court, Judge Barry Russell was not sympathetic to Bergstein's concerns, or his attorney's request that the creditors suing him produce extensive records to back their claims that he owes them money. Bergstein did not attend in person.
Russell said the court and its trustee are capable of determining which are legitimate business records and which are not, and that many of the requests relating to the creditors are unnecessary because there is ample documentation concerning the debts, a number of which already are the subject of judgments.
In the filing, Durkin related a series of meetings with Bergstein and his lawyers and occasions he was banned from entering Bergstein's offices for periods of time.
The filing noted that on May 6, Dances With Wolves Prods. sued a Bergstein company alleging a diversion of revenue. Durkin wrote that Bergstein insists he has no reason to be concerned about what happened to that money, but the trustee said he needs to determine whether it related to his investigation.
Durkin wrote that "Dances With Wolves" provides "a cautionary tale of what may happen if Bergstein is not required to make full and candid disclosure."
Although refusing to provide records, Durkin said Bergstein has objected to an interim trustee's report, calling it "inaccurate." Durkin noted the irony of that, pointing out that it is Bergstein who has the information necessary to make an accurate report.