Bankruptcy judge Barry Russell delivered a serious blow to the Aramid Entertainment Fund's case against Miramax co-owner Ronald Tutor and film financier David Bergstein this week, issuing five orders that disallow most of Aramid's claims to upwards of $140 million.
Aramid and other creditors have been engaged in a protracted legal dispute with Tutor (pictured left), his former business partner and several of their companies. Tutor, a construction tycoon, is co-owner of Miramax and other film properties.
Aramid was seeking money for loans they made to companies that then went bankrupt, believing Tutor defrauded lenders. However, the judge disallowed all but $2 million in claims.
“The orders mean for all practical purposes that Aramid has almost no claims remaining in the bankruptcy cases collectively,” Jeffrey Garfinkle, attorney for the defendants, told TheWrap.
Garfinkle said Aramid’s loans were standard in the movie production industry and that they had no guarantors. When the films produced did not generate enough profit and there was no collateral to back those loans, the companies went bankrupt.
Aramid’s David Molner disputed Garfinkle’s claims, claiming malfesance on the part of Tutor and Bergstein.
“This lawsuit apes recent motions brought in the bankruptcy and continues the cherished Tutor-Bergstein tradition of filing lawsuits instead of admitting they stole money and went gambling with it,” Molner said in a statement. “They deliberately defaulted on a whole raft of loans in order to create a “distressed” bonanza for themselves – they did the same thing to other film libraries (including Intermedia) and in other businesses.”
Aramid is likely to appeal.
Pamela Chelin contributed to this report.