David Bergstein’s BTP Acquisition Co. paid Image Entertainment a $2 million merger termination fee, but will continue to distribute ThinkFilm and Capitol Film theatrical releases through the homevid company under an amended output deal.
Under the settlement, outlined in an SEC document on Monday, Image will receive $1 million of the $3 million held in trust while the two sides hammered out an agreement to end their planned nuptials. The original March 29, 2007 merger agreement called for Bergstein businesses operating under the names of CT1 and R2D2 to guarantee a $4.2 million business disruption fee.
The merger was extended several times before Image ultimately filed suit against Bergstein’s various business entities on Jan. 24 for anticipatory breach of contract. The two parties filed a flurry of lawsuits before L.A. Superior Court granted Image’s motion to compel arbitration. The settlement was brokered June 24.
A Dec. 7 output agreement between the groups was amended under the settlement, but details were omitted from the filing as confidential. Both parties were ordered to pay their own legal fees.
The failed merger has taken its toll on Image over the past year. Last week, the company posted a $23.05 million loss for its fiscal year — nearly double the amount the previous period — on charges associated with the merger and a $10.4 million writedown in its fourth quarter for advanced royalties.
At the time, prexy David Borshell, who assumed the top spot in the company on April 1, lamented how distracting the failed merger had been, but put a positive spin on the fact the two parties had finally resolved their differences (Daily Variety, June 27). Bergstein’s Capitol Films and ThinkFilm businesses are embroiled in a series of lawsuits, many stemming from their alleged failure to pay fees.
Alex Gibney, director of “Taxi to the Dark Side” has gone public with his crusade to win $1 million and distribution rights for the ThinkFilm release. The Capitol Films production of “Nailed,” meanwhile, has been shut down by IATSE several times for failure to pay its crew and by SAG at least once for failure to have mandated cash reserves to pay its thesps, which include Jake Gyllenhaal and Jessica Biel.
It especially galls certain filmmakers that Bergstein companies continue to receive coin for DVD sales of pics such as “Before the Devil Knows You’re Dead,” but is not paying monies owed the filmmakers.