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WEDNESDAY UPDATE: The jury came back today with an additional judgment of $500,000 in punitive damages.
TUESDAY 7:15 PM: Deadline has learned that a Los Angeles Superior Court jury today unanimously awarded the controversial film financier David Bergstein the $49.5 million damages against his former in-house counsel Susan Tregub at Capitol Film for breach of fiduciary duty and legal malpractice. But this isn’t over yet. Today’s verdict determined that Tregub (now in private practice) acted with malice, so the second phase of the trial involving punitive damages will start tomorrow when the monetary figure could go higher.
Related: David Bergstein Sues Aramid Entertainment
The two-year case arose from Tregub going to work for Aramid Entertainment Fund in 2009 after Capitol. That move is what Bergstein claimed lead to Aramid and its principal David Molner pushing five of his companies including Capitol and Thinkfilm into bankruptcy and 
causing him $269 million in damages. Tregub admitted that, after she was no longer working for Bergstein, she did work for the other side. A series of emails shown during the trial were offered to show Tregub had provided confidential information. The 2009 and early 2010 correspondence between Tregub, Aramid, Molner and the company’s lawyers made up the bulk of the evidence in Bergstein’s case. And it was not a pretty picture. Even Tregub’s own attorney Hayes Michel admitted at one point in the trial that his client probably conducted herself unprofessionally with her behavior toward Bergstein and Capitol Film. The jury agreed with Bergstein’s argument that Tregub breached her legal and fiduciary duties to him. The verdict in the case, which was first filed in March 2010, came after a week and a half trial in front of Superior Court Judge J. Stephen Czuleger.
Related: Aramid, Screen Capital, David Molner Sued By Ronald Tutor, Library Asset Co.
Construction tycoon Ron Tutor also had been a plaintiff with Bergstein in the case but then dropped out earlier this year.
Related: David Bergstein Ends Miramax Lawsuit
This isn’t the only case Bergstein has going on this matter. Earlier this year, Bergstein sued LA law firms Stroock & Stroock & Lavan and Levene Neale Bender Yoo & Brill for their part in Tregub switching sides. Seeking at least $100 million in damages, Bergstein claims the firms, who represent Aramid Entertainment’s Molner and other creditors in their bankruptcy cases against Bergstein, gained confidential information about him and his companies from Tregub while she worked for him. No trial date has been set for the case against the law firms. In the current case, Hayes Michel of Baker Hostetler represents Tregub. Bergstein was represented by Lucia Coyoca of Los Angeles firm Mitchell Silberberg & Knupp.
Deadline's Dominic Patten - tip him here.
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so crooks can win in a court of law?
the crooks in this case were pointed out by the jury. Even when he wins in court, people take shots at him.. I’m sure that going forward, those that portrayed him as darth vader will be exposed as the real villians.I wouldn’t be surprised to find there was a long list of accomplices who said and wrote things for their own benefit.So many judges…………..
Lets face it. Most Entertainment lawyers would be disbarred for conduct we all accept as common industry practice.
Hats off to you, David!
It’s common practice to breach your fiduciary duty and to disclose confidential information (that should not even be in your possession) to a competitor of your former employer? No wonder lawyers have such a great reputation (and I say that as a lawyer who is appalled that this woman is still able to practice).
Regardless of the verdict, Bergstein is a really really bad guy who hurt many many people, stiffing the little guys on dozens of ifilms.
And that is based on your vast personal knowledge of Capitol Films dealings with third parties after David Bergstein assumed control?
No, it is based on individuals, dp’s production designers, writers, directors and others who were ripped off by bergstein for their wages.
So now let’s see how long it takes to actually collect? 1 week? 6 months. 2 years with appeals from defendant.
ok, but what is this 49.5 million dollar judgment worth?
Tregub must be broke. Did she have a malpractice policy – and for how much? – and will her insurers evade liability due to her bad acts?
Seems like the other law firms Aramid used will end up paying more for colluding with Tregub. These firms have bigger pockets and bigger policies.
You can be sure that both firms have giant (perhaps as large as $100M or more) policies. Their shared problem is that although their respective insurance carriers may pay approved settlements or defend the lawsuits; they are likely to do so reserving their rights against the insureds, who may have engaged in something well beyond mere “negligence”. Even the best policies may not cover everything in the nature of intentional misconduct…Stay tuned…for the partners at SSL and Neale Bender, “it’s going to be a bumpy night”…and perhaps a few sleepless ones as well.
After punitives are awarded, it will be a $100 million verdict. And then, Tregub’s co-conspirators (who were paying her lawyer bills) will face the co-conspirator lawsuits, with the facts and damages already determined by a jury.
Stroock&Stroock law firm, Leven Neal law firm, David Molner personally and his defunct hedge fund Aramid, and their insurers, will all have to pony up the $100 million.
Too bad the corpulent journalist who took $35 grand in cash to publish 50 dead-wrong hit pieces in HR about this case, can’t be called to account.
Who owns the film rights to this tale?
Tregub wasn’t disbarred??
Not yet but she will most certainly be disbarred. This is one of the most egregious breaches of a lawyer’s fiduciary duty to a client I have ever seen in 34 years of practice. What client would ever be willing to repose any trust in someone like her?
Maybe now he can reimburse crew members and vendors for unpaid wages on his unfinished film, Nailed.
The only thing that bankrupted Capital and ThinkFilm was Bergstein himself. He shuffled company money through numerous LLCs into his own private accounts. This is what the man does. He buys companies, steals from them, bankrupts them (fleecing investors) and moves on to the next victim.
Tregub knew all about it. If she was smart she would have blown the whistle years ago in exchange for immunity.
That would require the AGs or the gov’t actually caring about white collar crime.
If they awarded him so much it shows that it is perhaps her fault he didn’t have the money to pay those that deserved it. He has said from the beginning he was the victim and maybe he was telling the truth. Jury’s just don’t hand out that kind of settlement.
He was stiffing people long before their falling out. She was his lawyer WHILE he was effing over producers, investors, vendors.
Her big mistake was breaching confidentiality and going to work for his competition. No justice done in any of this. Just a bunch of assholes and their lawyers playing with other people’s money.
Right now Bergstein must be feeling pretty good. wonder if he’ll come back to the film biz……
Bergstein may have his issues and there no question he has them, but in this instance and this case, he is very much in the right.
Good Job David, It took balls to sue a bunch of lawyers with deep pockets who kicked and screwed you when you were down.
Section 6068(e)(1) of the State Bar Act provides in relevant part that “it is the duty of every attorney … to maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.” This is how it’s supposed to work in the American justice system. Everyone, saint or terrorist, is entitled to zealous, independent counsel. Switching sides and disclosing confidential information seems like a heinous and flagrant violation of legal ethics. Whether Bergstein or Molner or some combination of both caused Capitol’s liquidity problems and the concomitant cascade of unpaid bills and litigation is irrelevant to this issue.
Interesting that everybody is focusing on the film industry and his ventures into the film industry…yet nobody is talking about the numerous investment companies, asset management LLCs, and other companies that he has left in his wake. Destroying everything in his path, leaving countless companies, and more importantly individuals, out of work and out of money. The truth will eventually come out.
The Truth,
But when all of truth does come out, who does it benefit? All of those asset management LLCs and other companies are already damaged, or gone. Along with all the employees who worked for those companies. It’s all gone, every bit of it. Sure, Bergstein may have been “right” in this case….but it doesn’t make up for all the damage to all the people he has already done, and will continue to do so now that he has something positive going for him. His reputation was already damaged, yet people and companies still trusted him and invested….now, with this lawsuit, he can play the victim and dupe more companies into investing in him. He has destroyed so much, and will repay none of it. That’s the shame.