EXCLUSIVE: After more than four years of lawsuits, disputed loans, tattered reputations and tens of millions in fees, the vitriolic war between film financier David Bergstein and Aramid Entertainment looks to be almost over. And the victor might shock you. The parties have reached a settlement agreement, according to filings this week that, if approved, would see Bergstein paid $6 million from the bankruptcy protection-seeking hedge fund. The film financier and his former associate investor Ron Tutor also will acquire “100%” of the equity that longtime legal foe and Aramid exec David Molner has in the film financing fund, estimated to be nearly 5% of the total. Bringing movies back into it, the deal additionally gives Bergstein full rights to the Tony Kaye-directed 2009 pic Black Water Transit, which never was released Stateside due to the litigation.
The settlement deal goes before the bankruptcy court in the Southern District of New York on September 23. If approved and signed by all the parties, it would kick in a week after the effective date.
It was Cayman Islands-based Aramid’s move to Chapter 11 earlier this summer that brought this sprawling legal saga between Bergstein and the fund to the peace treaty table. Joint Voluntary Liquidators Geoffrey Varga and Jess Shakespeare “have accomplished the seemingly unimaginable, which they were told by nearly all involved could not and would not be done in the foreseeable future — David Bergstein and David Molner have agreed to lay down their swords and to end the litigation morass,” says the September 2 motion to have the settlement approved (read it here). “The parties to the Actions — many of whom have years of history and animosity between and among them — have historically employed extraordinarily aggressive litigation tactics,” the September 2 filing adds, putting it lightly. Besides the paying of the $6 million claim by Bergstein and the equity shift, the settlement aims to wrap up all the other grinding and convoluted lawsuits the various parties have going on against each other in various jurisdictions.
As is always the case in matters like this, it all came down to money — AKA pay now or pay later. “After discovering that, in addition to paying its own legal bills in the litigation with Mr. Bergstein and his related parties, AEF was paying the legal bills of Mr. Molner and other parties related to Mr. Molner based on claims of contractual indemnity owed by AEF, and upon learning the magnitude of those bills, the JVLs became more convinced that the litigation had spiraled out of control and that serious consideration must be given to resolving the Actions,” the motion notes. The Aramid and Molner legal fees are estimated to be more than $22 million.
Aramid is represented by James McCarroll, Jordan Siev, Michael Venditto and Richard Robinson of NYC firm Reed Smith LLP. Alex Weingarten of the LA offices of Venable LLP and Steve Jay Katzman of San Clemente’s Bienert, Miller & Katzman PLC are representing Bergstein’s interests in the case.