Capitol cannot transfer assets, judge says
Embattled film financier David Bergstein has sustained another loss in a bankruptcy hearing involving one of his companies, this time in the U.K.
Allied Irish Banks and Aramid Entertainment won their case Thursday against administrators of Bergstein’s now-defunct Capitol Films. The company had been put into administration — a British proceeding similar to a Chapter 11 bankruptcy — earlier this year.
As part of the ruling, administrators David Rubin and Henry Lan, who acted on behalf of the defunct production company, will likely be liable for costs associated with the court proceedingsin a loser-paying system that differs from the U.S.
The judge also ruled that Capitol’s assets could not be sold to another Bergstein-controlled entity, Pangea, which sources say would have made the creditors lose money they claimed Capitol still owed.
Aramid also won ownership to 2008 film “The Edge of Love,” which the company produced. “I also do not think that the manner in which the administrators sought to deal with the difficulties introduced by the Pangea assignment was appropriate,” Judge Richard Snowden wrote in his ruling, noting that the pair had not ascertained a fair value for Capitol’s assets before the proposed sale.
Capitol, a U.K. production and financing company, is the subsidiary of Capital Films Development — a Bergstein entity recently put into the bankruptcy in the U.S.
“I think we’re all grateful that the U.K. has a loser-pay system,” said Aramid chairman and co-founder David Molner. “And we had a terrific judge in this case.”