Durkin may not receive information sought

Doubts David Bergstein will provide docs for Thinkfilm, others

The interim trustee appointed by the federal bankruptcy court to oversee and report on Thinkfilm and four other companies controlled by Pangea Media CEO David Bergstein has filed his third status report, which concludes that he may never get all of the information he has been seeking. "It is doubtful whether David R. Bergstein will ever provide complete and adequate information," said Ronald Durkin, the former FBI agent and forensic accountant appointed for the involuntary Chapter 11 bankruptcy action.

Although federal judge Barry Russell on July 28 designated Bergstein as the representative of the companies that creditors want to force into bankruptcy, Durkin reports that Bergstein "has still failed to provide an inventory of the (companies) assets or allow" Durkin to copy information from the computer he personally uses or that of his assistant Frymi Biedak.
The report said Bergstein told Durkin much of the information from those computers is available on the office computers he was allowed to copy, and which the court on Aug. 25 ordered be turned over to the trustee.

After a series of legal maneuvers to delay or stop him from speaking to the trustee under oath, Bergstein did finally appear and answer some questions and turn over a number of documents on Aug. 3 and Aug. 30, and is scheduled for another session on Sept. 28. Biedak also was examined after similar legal challenges on July 30, Aug. 2 and Aug. 27.

The trustee also finally examined construction executive Ronald Tutor, after a series of legal challenges, who had co-owned some of the companies in the bankruptcy until at least Jan. 23, 2009, when according to the report he sold all of his interests (representing millions in investments) to Bergstein for $10. Tutor was examined on July 27 and Aug. 27.

Tutor is now partner in a group that is in the process of acquiring Miramax Films form Disney for $660 million; which is separate from the bankruptcy action.

What Bergstein, Biedak and Tutor said or did not say, however, is not part of the report, because on July 28 Judge Russell agreed to keep it all confidential for now, even from the group of creditors who filed the suit to force the involuntary action.

However, the report said that during the examinations while Bergstein, Tutor and Biedak technically responded to the court's orders, they would not give specific answers to many of the trustee's questions. Instead they responded by saying "the information is in the box," referring to what Durkin refers to as "a 400-box document dump."

Durkin said in the report he and his team are now pouring over these thousands of recently acquired documents.

Durkin also makes reference to a motion by Bergstein's side to force some of the creditors, in particular David Molner and the Aramid Entertainment Fund, to put up a multi-million dollar bond in case they lose and Bergstein's side successfully sues.

Durkin writes about what he calls the "inconsistency" and "contradiction" in the request that the creditor post a bond. He said that that while they are asking for a substantial bond, Bergstein's lawyers also said the companies in the action have suffered substantial damages and "have no active business and little, if any assets."

Just what happened to the assets they once had continues to be a big part of what Durkin has been trying to determine. In the new report, he says he has been successful, with court orders in hand, in getting a large amount of documents from Bank of America (4,000 pages); Comerica Bank; Fortress Value Recovery (which represents the bankrupt New York hedge fund D.B. Zwirn, which was the companies biggest backer); Image Entertainment (relating to Bergstein's failed 2007-2008 attempt to acquire that company); Octave Fund Limited (concerning the bankruptcy of the company Intermedia); and Susan Tregub, Bergstein's former lawyer who was examined and produced records and some bank statements.

Durkin said he is still seeking information from American Express concerning transactions involving Bergstein's wife Sara; Michael W. Barnes, a lawyer who represented four of the five companies; and Eileen Burke, formerly an employee of DB Zwirn who oversaw the Bergstein loans prior to the hedge fund's bankruptcy.

Durkin said he is also going to ask the court for orders to get records from three Las Vegas casino companies -- the Mandalay Bay Resort, Venetian and Palazzo Resort Hotels, and Wynn and Encore Hotels - to determine whether company funds were used to pay Bergstein's gambling debts.

The trustee's report said that Bergstein and Tutor have complied with an order to provide information on who is compensating their lawyers. That too is confidential.

The motion to force Aramid to put up a bond, the creditor's motion for a summary judgment to force Thinkfilm into bankruptcy immediate and other issues will be heard in Judge Russell's courtroom Oct. 6.

There was no response to a request for comment on this article from an attorney representing Bergstein and Tutor.
comments powered by Disqus