Just when it seems like the legal battle between film financiers David Molner and David Bergstein can’t get any nastier, these two mortal enemies find fresh ways to up the ante on outrage.
In a motion filed Monday in Los Angeles Bankruptcy Court, attorneys for Molner’s Screen Capital International and Aramid Entertainment are asking for Judge Barry Russell to recuse himself from a case involving tens of millions of dollars in debts and allegations of financial fraud. The legal back-and-forth between the two men has dragged on since five Bergstein-controlled film financing entities were forced into involuntary bankruptcy in 2010.
In the filings, Molner’s legal team argues that Russell has lost the ability to appear neutral in the proceedings after a report surfaced of recorded conversations in which Bergstein alleged that the judge was seeing a prostitute.
In a 2012 taped conversation with former business associate Parmjit “Paul” Parmar, Bergstein said he planned to capitalize on the information, but didn’t want it to “look like extortion,” according to an August story in the Hollywood Reporter.
“Each time that this particular tape and its contents are mentioned, it has an impact on the public perception of the process of justice,” the filing reads. “No reasonable person, with full knowledge of all the facts, could expect that any judge could remain impartial and able to rule in a case where his professional and personal life have been so blatantly impugned by a litigant appearing before him.”
Bergstein hit back at the motion in an interview with TheWrap, saying the taped conversations were edited and that he had admitted in a subsequent taped conversation with Parmar that the information about Judge Russell was false. He said he purposely misled Parmar to test his loyalty.
“I made it up,” Bergstein said. “I wanted to see if he was running back to Molner. I didn’t think I was being taped, and I expected Molner would bring it up in court and he would look like a fool.”
Russell did not respond to requests for comment, but Molner slammed Bergstein’s depiction of the event surrounding the taping.
“Is that a serious comment?” Molner said. “He got caught on tape talking about his extortion plans, but now he wants us all to believe it was part of some secret agent double mission? Maybe next we’ll find out he was under special orders from Abu Nazir.”
The taped comments are explosive but Russell, who has been bankruptcy court judge for nearly 40 years, has a good reputation and has won awards from the Los Angeles County Bar Association and the American Bar Association for his work.
After siding with Molner and other creditors in their attempt to recover assets throughout much of the legal proceedings, the motion argues that Judge Russell began abruptly reversing himself last June and finding in favor of Bergstein.
Attorneys for Molner argue, “… it is the timing, and the fact of this Court’s reinterpretation, as well as the diametrically opposed conclusions the Court reached on the same issue, that are significant. In fact, the change of position only complicates the quandary created by Bergstein’s statements and threats to act.”
Bergstein counters that Molner has filed dozens of claims against him, his family and his associates as part of a death by a thousand paper cuts legal strategy and says that there is no evidence he engaged in financial fraud. He said that the more than a dozen complaints that have to date been adjudicated have been dismissed.
“Molner’s entire strategy is delay and delay and delay,” Bergstein said. “He can’t win anything because there’s nothing there.”
Judge Russell will rule on the motion to recuse. If he opts to remain on the case, attorneys for Molner can appeal his decision to federal district court.