August 07, 2012 5:00am PT by Alex Ben Block
Miramax at Center of David Bergstein's Bitter Trial Against Former Lawyer
In more than two years of legal battles, embattled movie financier David Bergstein repeatedly has blamed many of his troubles on his former lawyer Susan Tregub, whom he says breached her ethical obligations to him as an attorney.
Beginning Tuesday, Bergstein will have his day in Los Angeles Superior Court in a complicated, bitterly contested trial expected to last three weeks.
While the amount of money Bergstein stands to win is minimal -- Tregub apparently does not have significant resources -- a victory would clear the way for Bergstein in related cases. So the stakes are high.
Tregub, now in private practice, has been equally adamant that she did not do anything improper or illegal. However, she admits that after she was no longer working for Bergstein, she did work for those on the other side of some of the legal battles he is now fighting -- including the federal case that resulted in the bankruptcy of five companies he had controlled, such as Capitol and Thinkfilm.
A key element in the case will be whether Bergstein can prove Tregub breached her legal and fiduciary duties to him, as well as showing how he was damaged.
While several dozen witnesses could be called in the case, about 16 are expected to testify. And of those, six are people with knowledge of how Disney sold Miramax in 2010 to a group that included Bergstein and construction magnate Ron Tutor. Bergstein likely will say he could have had a bigger role in the transaction and within Miramax if not for all the bad publicity, much of which he blames on Tregub.
Among those six experts:
-- Nick van Dyk, described as “a senior vice president with Disney” will “testify re Bergstein’s involvement in the Disney sale of Miramax.”
-- Josh Grode, a prominent Hollywood attorney, will “testify regarding …damages related to the Miramax transaction and the effect of the bankruptcy cases thereon.”
-- Phillip Fier, described in court papers as “Plaintiff’s damages expert,” will testify about “damages suffered by [Bergstein] including but not limited to the valuation of the film libraries, the wasting nature of film assets and the impact of the loss of the Miramax transaction as to Bergstein’s credentials for future deals.”
Tutor is expected to support Bergstein in his testimony; he had sued Tregub along with Bergstein but dropped out earlier this year.
Bergstein, according to the filing, is expected to testify for eight to 10 hours about Tregub's work with him and his related entities and the trust and confidence he placed in her. “He will also testify,” according to the court document, “as to her threats, the malpractice and breach of her duties, and the harm caused by her conduct.”
Bergstein also tried, unsuccessfully, to have Tregub disbarred.
Tregub, who worked for Bergstein for nearly a decade before they parted ways in 2009, will be on the stand from four to six hours. Besides describing her work for Bergstein, she will discuss “her decision to ‘switch sides’ and the work she did for Aramid adverse to Bergstein and her former clients.” In her own defense, Tregub will testify to her “lack of wrongdoing” and the lack of “causation between [Bergstein’s] alleged damages and [his] conduct.”
The defense also plans to call David Molner, who represents the Aramid Entertainment Fund and who led the creditors group that forced Bergstein’s companies into bankruptcy. Molner has been involved in other Bergstein-related litigation.
Molner hired Tregub to work with the Bergstein and Tutor creditors around 2010. Bergstein -- with and without Tutor -- has sued Molner and lawyers representing him. The defense plans to show the “lack of connection between [Tregub’s] actions and actions by Aramid” as well as the “financial condition of [Bergstein and his companies] that led to defaults on loans and bankruptcy.”
Also on the list, though not expected to testify, is Richard Nanula, chairman of Miramax and a principal in Colony Capital, which along with Tutor and others is a major equity holder in the new Miramax.
If Bergstein wins this case, he could file more lawsuits charging Aramid and others with acting improperly and wrongfully causing all of his and his company’s legal problems. And Aramid, as well as several law firms, could suffer big losses.
For instance, lawsuits filed in L.A. Superior Court in April seek $100 million from two Los Angeles firms that represented Aramid and others who opposed Bergstein: Stroock & Stroock & Lavan and Levene Neale Bender Yoo & Brill.
“Defendants used the confidential information provided by Tregub,” that lawsuit charges, “to file several lawsuits, initiate involuntary bankruptcy proceedings against Bergstein-related entities and disparage Bergstein repeatedly in the press and with other entertainment industry players.”
However, if Tregub wins, she could sue Bergstein for malicious prosecution and for wasting her time and resources, as well as harming her professional reputation.
Both sides are angry, bitter and entrenched, so the chances of a quick out-of-court settlement seem slim.
Representatives for Bergstein and his companies and for Tregub did not respond to a request for comment. A representative for Miramax also failed to respond.
DISCLOSURE: The author of this article also has been named on the witness list and might be called to testify. An attorney for Bergstein deposed Block a month ago but chose not to call him as a witness.