David Bergstein, Ronald Tutor Settle Lawsuit on Eve of Trial
Another suit by hedge fund DB Zwirn is said to be close to settlement.
A week before they were scheduled to testify before a jury in federal court, embattled film financier David Bergstein and business partner Ronald Tutor have settled a lawsuit brought by Aramid Entertainment Fund. The amount of the settlement has not been disclosed but it is believed to be more than $10 million, according to a source.
The suit brought by Aramid in May 2010 sought about $17 million that Bergstein and Tutor had guaranteed in loans and other business transactions involving several movies, including Love Ranch, The Edge of Love, Black Water Transit, The Good, Incendiary and Bad Meat.
It also involved transactions related to the sale by a Bergstein controlled company of IM Global and the sale of Intermedia.
Aramid later in 2010 forced the sale at auction of Love Ranch and Five Dollars a Day, but it continued to press for repayment of the guaranteed amounts.
The case started in Los Angeles Superior Court but was moved to federal court in Los Angeles, where a judge had ruled for Aramid, giving it a judgment on the issue of whether Bergstein and Tutor were liable. The trial, scheduled for next week, would have decided how much they owed.
Tutor declined to comment and Bergstein's lawyer did not respond to a request for comment.
David Molner of Aramid would not comment on the settlement size or terms, noting it was confidential. In a statement, Molner did say, "We've resolved the matter. I expect our shareholders to be very pleased with the outcome."
Tutor and Bergstein also are said to be in negotiations to settle a larger lawsuit brought in L.A. Superior Court by a successor to the D.B. Zwirn Special Opportunities Fund in November 2009. Zwirn was a New York City hedge fund that was the largest lender to the movie companies assembled by Bergstein and Tutor, including Capitol, ThinkFilm and R2D2. Zwirn later went bankrupt.
The Zwirn lawsuit started out seeking repayment of guarantees of about $40 million, which Tutor and Bergstein personally signed. With interest and legal fees, the amount sought had grown to about $66 million. That case is scheduled to go before a judge (but not a jury) late next month in Los Angeles, and Bergsten and Tutor are both said to be on the list of witnesses to be called to testify.
In addition to being Bergstein's business partner in the past, Tutor is CEO of a large publicly traded construction company, Tutor Perini, and is one of the largest investors in the new Miramax Films.
Bergstein and Tutor are also still involved in an involuntary bankruptcy of five companies that were controlled by Bergstein and at one time also owned by Tutor. Bergstein earlier this week petitioned the federal court to keep confidential some of his business and personal records that have become part of the case, and the judge is expected to rule on that motion within a month.