Film financier David Bergstein has filed suit over Disney’s December 2010 sale of Miramax to a group of investors including Colony Capital, Filmyard Holdings, Miramax chairman Richard Nanula, and other individuals involved in the deal. The suit, which you can read here, was filed today in Los Angeles Superior Court. Bergstein alleges numerous counts of fraud, breach of contract, unjust enrichment and that he is owed money for his role in facilitating the $660 million transaction for Miramax. His claims include arranging crucial financing for the deal and that without “the capital he expended and his considerable efforts, there would not have been a deal”.
In putting together his initial campaign to purchase Miramax, the suit alleges Bergstein approached investor Ron Tutor and led evaluation and due diligence on Miramax and its film library. Additionally, the suit claims Bergstein created a business plan that ultimately was put into place once the acquisition was completed. But after Bergstein won the competition to acquire Miramax, the suit alleges, Colony Capital and its CEO Tom Barrack approached Tutor and asked to join the deal in exchange for investing $100 million of its own money. The lawsuit claims there was an agreement for Bergstein and his Exodus Film Co to receive a non-dilutable 5% equity in the deal, a 1% transaction fee, and consulting agreement.
The suit says Colony’s Barrack subsequently asked Bergstein to reduce his equity interest to 3.33% and pledged no further reductions. Bergstein agreed in the interest of getting the deal done, the suit says. The deal closed in December 2010. What followed, Bergstein contends, was concerted pressure by Nanula and Colony to further reduce his stake — to in essence shut him out of the deal, a process which Bergstein says really began after Colony got involved. Bergstein says he was paid $6.1 million as a closing fee but is still owed an additional $6.1 million deferred transaction fee plus more than $20 million in Miramax equity.
Much of this activity unfolded during a period of constant financial turmoil for Bergstein, including bankruptcy of his Capitol Films, ThinkFilms and other troubled companies. Additionally unpaid gambling debts in Las Vegas resulted in a bench warrant for him; it was later rescinded.