Controversial film financier on the hot seat over shoddy record keeping and structure of shell companies
David Bergstein was on the hot seat for nearly two hours on Tuesday as angry creditors attempted to tie the controversial film financier to billionaire Ron Tutor and slammed him for masking millions of dollars of assets through a byzantine network of shell companies.
“Every time I put something down in writing, I get crucified. Unspecified is as specific as I am willing to get,” Bergstein said during a hearing at the Los Angeles office of Ernst & Young.
Dressed in a navy jacket with white shirt and no tie, open slightly at the collar, Bergstein denied that he had backdated an agreement with Tutor. That agreement purports that the construction magnate and Miramax co-owner sold his stake in one of Bergstein’s companies for $10 in 2009.
That date is critically important because that is more than a year before the litigation began against the film financier.
Bergstein has been locked in an ongoing legal battle with more than 30 creditors, who have successfully forced several of his companies into bankruptcy and are currently trying to recover assets in order to pay off millions of dollars in unpaid bills.
They allege that Bergstein operated a complicated web of shell companies in order to hide his mounting losses. They further claim that despite his protestations to the contrary, Tutor remains linked to Bergstein and his suite of failed companies.
During Tuesday’s hearing, Bergstein was grilled by Leonard Gumport, an attorney for court appointed trustee Ronald Durkin; film financier David Molner, one of the lead creditors; and Whitman Holt, an attorney for MHF Zweite Academy Film.
Throughout frequently tense exchanges, Bergstein ducked and weaved around questions about his relationship with Tutor, refusing on the advice of his counsel to answer if the billionaire was paying his legal bills.
But it was the sales agreement which remained at the heart of the matter.
Under questioning from Gumport, Bergstein denied that a sales agreement with Tutor has been falsified, as a 400-page report by the court appointed trustee alleges. He said that any additional records showing that Tutor had unloaded his stake would have been controlled by his former attorney Susan Tregub.
Bergstein, who previously sued Tregub for breach of confidentiality, lay the blame for shoddy and incomplete records squarely at his former lawyer’s feet.
“I’m not trying to be Sergeant Schultz about the whole thing. The books were kept by Susan Tregub. I have no corporate records on my computer. The physical records were kept by Susan,” Bergstein said.
As for the dizzying list of shell companies owned and operated by Bergstein, the film financier said he was fuzzy about the details because Tregub had created the majority of them. He said he could not be certain if he had sketched an accurate picture of the many different business entities he controlled, because only Tregub had all the details.
“Susan would form 20 shell companies at a time, often on her own,” Bergstein said. “The formation of companies was often Susan’s sole responsibility.”
Bergstein will next appear before creditors on July 7.
He declined comment to TheWrap for this story.
Photo courtesy of the Los Angeles Times.