David Bergstein Sues Bankruptcy Trustee for Trying to 'Destroy' Him

16 REP NEWS David Bergstein
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A company controlled by movie financier David Bergstein filed a lawsuit Monday claiming that bankruptcy court trustee Ronald Durkin is “waging a personal and vindictive war” against him while conspiring in a “broad and wide-ranging attempt to destroy Bergstein."

The suit, filed in federal court in Los Angeles by Bergstein's U.K.-based Pangea Media Holdings, arises from the company's dealings with Daro Film Distribution, a Monaco-based film licensing company that Bergstein claims owes him money. The suit says Bergstein has been frustrated in his efforts to collect due to Durkin and his counsel Leonard Gumport having pursued the money because the licensed movies are or were owned by the now-bankrupt companies they oversee.

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“The trustee has taken his improper activity to new heights with respect to Daro’s payment," the suit alleges, adding that the trustee Durkin has ignored his attempts to settle the matter without further litigation.

Bergstein has been involved in several lawsuits related to the 2010 involuntary bankruptcy of five film companies he controlled. That case continues and has spawned numerous related lawsuits. 

The embattled film financier, who once ran ThinkFilm with friend and business partner Ronald Tutor, has blamed David Molner and his company Aramid Entertainment for conspiring with the trustee to try and "destroy" Bergstein, while making claims on the bankrupt companies. 

The new suit includes a long list of allegations that the trustee tried to force Bergstein into a settlement of the bankruptcy case “on extortionate, egregious and outrageous terms” that would require payment of more than $10 million.

Those improper activities are said to have included obtaining confidential information from Bergstein’s former attorney Susan Tregub in violation of attorney-client privilege and passing it to Aramid for use in Molner’s campaign to “destroy Bergstein,” and threatening Bergstein with “criminal prosecution” to “add teeth” to the trustee’s threat.

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The suit also says the trustee failed to agree to a settlement when Bergstein’s former business partner Tutor offered to pay $4 million to remove liens in the cases.

The trustee, according to the suit, has collected testimony, computer files and documents but "taken no steps to recover any funds" due to the bankrupt companies, while entering into “an improper agreement which allows Aramid to receive money that rightfully should go to secured creditors, even though Aramid previously released its claims against Bergsten and the debtor companies in the bankruptcy.

"Aramid continues to abuse the entire bankruptcy process after being emboldened over and over again by the Trustee,” charges the suit. In addition, the suit says Aramid in conjunction with the trustee has filed about 50 lawsuits against entities and individuals “calculated to punish people supporting Bergstein."

Aramid is not named as a defendant in this suit, although there is other litigation among the parties.

In response to the suit, Aramid’s Molner tells THR in a statement: "How can we be conspiring with the trustee that Mr. Bergstein chose? He forgets we each submitted three names to the U.S. Trustee’s office and Mr. Durkin topped the nominees put forth by the Bergstein-Tutor camp. Go sell crazy someplace else."

Durkin's lead attorney Gumport declined to respond directly to the charges in the suit or to comment on the merits of the claim. 

Separately, THR obtained copies of e-mails Gumport exchanged with Bergstein and his attorney in which Gumport says the trustee never told Daro or its attorney what to do with the money that is owed. Gumport does not give his permission for the transfer of any funds and does insist that any transaction be approved by the bankruptcy court.  

Email: Alex.Benblock@thr.com