Legal pressure on ThinkFilm mounts
Allied sues for $4.2 mil in unpaid bills
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Allied, which handles ads and promotions for feature films, filed the suit Wednesday in Los Angeles Superior Court. It accuses Bergstein of racking up $1.9 million in debt as of November and another $2.2 million this year while continuing to spend on acquisitions.
"Between January and May 2008, while most of the ThinkFilm debt to Allied was outstanding, defendants have gone on a lavish film licensing buying spree at various film festivals around the world, including a film about director Roman Polanski scheduled for release on (HBO) later in 2008," Allied alleges in the suit. "In addition, defendants now pre-pay for print and advertising services and that only for so long as Allied elects to do business with ThinkFilm at all."
Allied said it sent a final demand for the funds on May 12.
"Notwithstanding these demands, Bergstein has, on information and belief, directed ThinkFilm to simply ignore the demands of Allied," it added. "Neither ThinkFilm nor Bergstein have ever disputed the obligation to pay the $4.185 million due and owing to Allied."
Bergstein did not respond to a request for comment. But one ThinkFilm exec pointed out that Bergstein did not go to Cannes nor has the company made any acquisitions since "Roman Polanski: Wanted and Desired." A planned pickup announcement at the fest was canceled.
Bergstein is expected to close a bridge financing deal with U.K.'s Aramid Entertainment Fund within days, which would relieve some of his current financial pressures.
On the plus side, production of Capitol Films' troubled comedy "Nailed," starring Jessica Biel and Jake Gyllenhaal, resumed Thursday after having been shut down for a third time due to financial problems. Members of the Intl. Alliance of Theatrical & Stage Employees were ordered by IATSE leaders a week ago not to show up at the South Carolina set after not being paid.
IATSE-repped employees also stopped production on May 15 after not being paid, then resumed May 19. The Screen Actors Guild had ordered its members to stop working on May 9 after Capitol Films failed to deposit enough required money in SAG accounts set up to pay the actors.
Pic, directed by David O. Russell, began shooting April 15 and is due to wrap in mid-June. Forty-six checks for the production bounced due to insufficient funds, according to the film's bankers.
The problems with "Nailed" and similar difficulties with "Love Ranch" prompted SAG execs to meet with Capitol Films recently over its financial responsibilities for the shingle's upcoming "Labor Pains." It's understood that the guild has decided not to block the production after receiving assurances that Capitol would meet its obligations to pay the actors.
On the day before SAG shut down "Nailed," businessman Alexander Sandel filed suit against Bergstein and five affiliated production entities in L.A. Superior Court over loans totaling more than $4.5 million by Sandel, who used to run a DVD replication facility called Future Media Prods., to Bergstein and his entities beginning in early 2005. With interest, Bergstein owes Sandel more than $6.5 million, according to Sandel's lawsuit.
A few weeks earlier, a vendor sued ThinkFilm for more than $100,000 owed for services dating back to last summer, and other vendors are said to be preparing similar action.
Alex Gibney, who wrote, directed and produced "Taxi to the Dark Side" for ThinkFilm, only recently got paid for his Oscar-winning docu after lawyers threatened to take ThinkFilm into bankruptcy.
Bergstein had told Daily Variety earlier this month that some of the financial problems were a byproduct of ThinkFilm's earlier financial woes. And he said SAG's shutdown of production on "Nailed" stemmed from the project's bridge financier, the Footprint Film Fund, defaulting on its payment after principal photography began.
Bergstein acquired ThinkFilm and Capitol in 2006 and attempted to purchase homevid specialist Image Entertainment in March 2007. That deal ultimately fell apart after several delays, resulting in lawsuits on both sides.
(Anne Thompson contributed to this report.)
