David Bergstein Loses $50 Million Lawsuit Against Aramid Entertainment
Bergstein now has to pay the investment fund's legal costs.
Embattled movie financier David Bergstein's lawsuit against Aramid Entertainment Fund, claiming it breached terms of a 2009 settlement of a loan dispute, was dismissed on Aug. 5 by a Los Angeles Superior Court judge, who ruled the same action cannot be amended or re-filed.
Bergstein, who has been credited as a producer on films like The Whole Ten Yards and Before the Devil Knows You're Dead, had sought some $50 million in damages from Aramid, Screen Capital International, fund manager David Molner and related parties whom he blames for the 2010 involuntary bankruptcy of five companies he once ran. He says Aramid, after signing a waiver that it would not sue, filed numerous suits and was involved in the bankruptcy case.
The lawsuit says that violation of the terms of the waiver caused the assets of companies he had controlled (mostly movies) to diminish in value and caused negative press coverage, which interfered with Bergstein's ability to do business. Bergstein's suit also claimed that the legal battles have cost "millions of dollars of legal fees."
Now not only won't Bergstein win anything; but he will also have to pay Aramid's legal costs in the case.
"It is unclear if this damage is alleged to be due to anything other than the bankruptcies," wrote L.A. Superior Court Judge Michelle Rosenblatt in ruling the whole action is preempted by federal bankruptcy court law.
Alex Weingarten, an attorney for Bergstein, had argued in court that his client's claims did not depend on resolution of the involuntary bankruptcy; and that even if his client lost that case, the state court lawsuit would still go forward.
The judge did not agree: "The court finds that [Bergstein's] allegations are not based on pre-bankruptcy conduct [the 2009 waiver] but on the very act of filing the involuntary bankruptcy petition."
"Although [Bergstein] alleges the damages all stem from the breach of the release," writes the judge … the only 'action' explicitly referenced is the bankruptcy." She adds that Bergstein failed to "identify what legal actions might be at issue other than the bankruptcy."
The judge also ruled that statements from Miramax executives meant to show how Bergstein was damaged by negative press coverage failed to make that point; but instead showed that Miramax executives just didn’t want to do business with him.
Aramid's side successfully argued that the waiver only covered loans related to ThinkFilm, and that Molner and his company Screen Capital International were not signatories to the waiver.
The judge also ruled that Bergstein failed to establish that if the case ever went to trial that they had a "probability of success."
The judge further ruled that the complaint is barred by the bankruptcy code, "depriving this court of jurisdiction to hear the matter."
This is not the first time Bergstein and his former business partner Ronald Tutor have cited the 2009 waiver that Aramid signed when it received a settlement of about $3 million to cover the default of various movie-related loans.
A separate but similar case filed by Tutor, who is CEO of the Tutor Perini construction company, was tossed out of L.A. Superior Court in December of 2012.
There was no response from Bergstein's attorney to a request for comment on the judge's ruling, or an answer to whether further appeals are planned.