David Bergstein Bankruptcy Trustee Threatens Sanctions

In a motion filed in federal court, trustee Ronald Durkin says Bergstein and his lawyer filed false information.
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David Bergstein

Bankruptcy court trustee Ronald Durkin filed a motion in federal court Wednesday to compel beleaguered movie financier David Bergstein and one of his lawyers, Victor Sahn, to sign statements evidencing the finances of five companies now in involuntary bankruptcy.

The motion by Durkin, a former FBI agent and forensic accountant, threatens financial sanctions against Bergstein and Sahn for filing earlier financial schedules in “bad faith.”

Read the motion here.

Bergstein was identified by the bankruptcy court as the official representative of the five bankrupt companies, which include Capitol Films, ThinkFilm and R2D2, which was a holding company for Bergstein and his business partner Ronald Tutor.

The motion says that when Bergstein filed the financial statements previously, “he knew them to be false, deceitful and evasive.”

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When Sahn e-mailed those schedules to the court and trustee, the court filing says he also knew they were false and contained “legally frivolous assertions disclaiming Bergstein’s duty of cooperation.”

“Bergstein and Sahn submitted the amended schedules in bad faith,” adds the filing, “for the purpose of intentionally withholding information and failing to provide accurate information required” under bankruptcy law.

The motion asks bankruptcy court Judge Barry Russell to impose financial sanctions on Bergstein and Sahn for filing past statements in bad faith and to sanction their “bad faith litigation tactics.”

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Identical versions of the motion on behalf of Durkin by his attorneys, including Leonard Gumport, were filed in all five of the bankruptcy cases.

The trustee’s motion comes two days after a U.K. company controlled by Bergstein filed a lawsuit against the trustee and a movie distributor for interfering with Bergstein’s attempts to collect money owed from movies that he licensed in the past.

The trustee has said he never told that company not to pay, only that any transaction must be approved by the court.

The trustee has said repeatedly that he cannot act on behalf of the bankrupt companies because Bergstein has not provided necessary information. In a related civil trial against his former attorney, Bergstein did provide financial data that he had told the federal court he did not have.

This new motion is a reaction to the trustee’s frustration with how Bergstein has acted in the case.

Bergstein and Sahn did not respond to requests for comment.

Email: Alex.Benblock@thr.com