(Updated, Friday, 5:20 p.m., PST) A Los Angeles bankruptcy court judge denied David Bergstein's motions to force Aramid Film Entertainment to post a $25 million bond and to allow his business to operate without undue supervision from his court appointed trustee.
The court ruled that Bergstein's motions would only be heard after he appears in court on July 20 to answer to his Chapter 11 trustee's allegations that he is stonewalling an investigation into his companies' assets.
The hearing on Bergstein's bond motion has been scheduled for October 6 and the hearing on clarifying the role of the trustee has been scheduled for July 28.
Earlier:
David Bergstein is hitting back at the group of creditors currently suing him in bankruptcy court.
With the embattled businessman's bid for Miramax studios entering its 11th hour and criticism mounting from major Hollywood players and the guilds, Bergstein is trying to turn the tables on David Molner and Aramid Film Entertainment.
Aramid is attempting to recover approximately $16 million from Bergstein and his business partner Ronald Tutor. Bergstein and Tutor want Aramid to put up a $25 million bond, to demonstrate it has sufficient assets to pay costs if it loses the case.
Bergstein failed in an earlier attempt to have the Aramid's civil suit against him dropped last June. A Los Angeles district court judge found Bergstein and Tutors contention that the case should not go forward because of a lack of jurisdiction to be without merit.
Bergstein and Tutor are attempting a different tactic this time in a pair of motions filed Tuesday in the pending insolvency cases. Citing the harm that the allegations and protracted legal wranglings are doing to his primary business Pangea Media Group, Bergstein alleges that he should not have to pay legal fees if the court finds in his favor. He says the legal proceedings have cost the company $5 million in lost sales as many companies do not want to do business with him while the specter of bankruptcy looms.
Moreover, Bergstein and Tutor argue that the claims against them were the result of a personal dispute between the Pangea C.E.O and Molner. Bergstein says he was paying off his debts to Aramid until Molner jacked up the interest to usurious rates of as much as 50 to 100 percent.
'The Court was told this is the 'Enron of the entertainment industry.' In fact, it's more like the Sonic Blue of the entertainment industry," The filing reads. "This case presents a morass of hardball tactics, unethical conduct and questionable representations to the court. While the debtor is tempted to seek dismissal, it will defer dispositive motion practice until discovery is concluded on key points. Presently, however, more than adequate cause has been shown to impose a $25,000,000 bond on petitioners."
Bergstein alleges that Aramid is an off-shore company, operating out of the Cayman Islands and is attempting to disguise the fact that they are in severe financial distress.
