Federal Bankruptcy Court Judge Barry Russell has told embattled film financier David Bergstein that he needs to start cooperating with his court appointed trustee or he will be held in contempt, according to an individual who witnessed the hearing in Los Angeles.
Judge Russell said on Tuesday he sensed that Bergstein, his bookkeeper, and his erstwhile business partner Ronald Tutor were “stonewalling” interim trustee Ronald Durkin’s efforts to unspool the tangled finances of five companies controlled by Bergstein.
Judge Russell warned of dire legal consequence should Bergstein and his associates fail to give Durkin access to their financial records immediately.
“[I] can’t make anyone do anything, but [I] can make them awfully sorry that they didn’t,” Russell told Bergstein.
Bergstein (photo at left by Los Angeles Times) and Tutor were also ordered to give depositions under oath and to allow Durkin and his team to access and copy their business and personal computers.
Bergstein is currently being sued by nearly 30 creditors – including advertisers, publicists and the Writers Guild West – in an attempt to force the film financier into Chapter 11. In March, Judge Russell took the extremely rare move of appointing a trustee to take over the operations of Bergstein’s constellation of companies. Durkin, a former FBI agent who owns an L.A. based firm that investigates white collar fraud, was named to the post in April.
Linking Bergstein and Tutor (photo at right) together in a court of law could not come at a worse time for the billionaire investor. Earlier this month, Tutor won his bid to buy Miramax Studios for $675 million from Disney, along with Bergstein and their partners Colony Capital and Morgan Creek. But since that sale was announced, Tutor has made attempts to distance himself from the controversial film financier, including a now-disputed interview with the Hollywood Reporter in which he suggested that the radioactive Bergstein would play a limited role in the new company.
Durkin was represented by his attorney Leonard Gumport. Bergstein and Tutor's various business interests were represented by three attorneys.
Bergstein however did not have representation of his own nor did he appear at the hearing.
That left him with little ability to contest the court ordered date of Aug. 3, 2010, when he scheduled to give his deposition. Judge Russell said there would be no negotiation on that date, and that Bergstein would have to show up at the examination or “suffer the consequences.” He then advised Bergstein to get counsel.
Gumport told the court Tutor and his counsel were not cooperating with the investigation. He disputed Tutor's claims that he was kept in the dark about Bergstein's operations, arguing that he was a 50 percent co-owner of “this empire” until January 29, 2009, at which point he sold his interest to Bergstein for $10.
“It is inconceivable that Tutor knows nothing," Gumport said.
