Tuesday, May 1, 2012
Film financer David Bergstein has filed suit against the his co-venturers in the 2010 acquisition of the Miramax Film Company (Miramx). Bergstein alleges that his former business partners denied him money and an equity stake owed for his role in the acquisition of the film label from the Walt Disney Company. The suit, filed in Los Angeles Superior Court, is for breach of contract, fraud, unjust enrichment, and other claims, and named as defendants Miramax Chairman Richard Nanula, Colony Capital and Filmyard Holdings. According to the Chicago Tribune, non-party Ron Tutor and his group of partners created Filmyard Holdings to finance the deal for Miramax and control the studio after the sale was complete. Colony Capital, an investment firm, was one of the investors, and Nanula, a former Disney executive who is now Miramax’s chairman, is one of Colony’s principals.
Bergstein claims that he is owed tens of millions of dollars for his part in structuring and negotiating the purchase. Bergstein acknowledges that he was paid his $6.1 million “Closing Fee” but claims that he is owed an additional $6.1 million “Transaction Fee.” In addition, Bergstein maintains that, although he was originally promised a non-dilutable 5% stake in the equity of the transaction, he agreed to reduce his non-dilutable stake to 3.3%, in return for a promise from Colony that his interest would not be further reduced. He claims that defendants then sought to further reduce his stake “[a]s soon as the ink was dry on the operative agreements.” The heart of the suit seems to be a claim that his share was further diluted by transactions about which the defendants have refused to provide information.
As reported by The Wrap, Bergstein has been a controversial figure in the movie industry in recent years and has said that Nanula and other investors planned to use the bad publicity surrounding his legal problems as a way to keep from honoring their deal. As the complaint in this case makes clear, Bergstein can give as good as he gets when it comes to bad publicity.