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Film, TV Financing Hedge Fund Aramid Entertainment Files for Bankruptcy

GeorgetteMillerLaw.com > Bankruptcy  > Film, TV Financing Hedge Fund Aramid Entertainment Files for Bankruptcy

Film, TV Financing Hedge Fund Aramid Entertainment Files for Bankruptcy

The company blames its financial troubles on bad loans and cites legal disputes with David Bergstein.

Movie and TV financing hedge fund Aramid Entertainment Fund Ltd. has filed for Chapter 11 bankruptcy, claiming it needs protection from creditors while it deals with the costs of suing borrowers who failed to repay loans.

Aramid “has been embroiled in substantial and time-consuming litigation relating to some of its investments,” said Geoffrey Varga, a consultant helping to liquidate the fund in a statement. “The prosecution and defense of these actions has consumed a substantial portion of AEF’s liquidity and exposes it to potential liability.”

Aramid listed consolidated assets of $237.3 million and consolidated debt of $11.5 million as of April 29 in Chapter 11 documents filed on Friday in U.S. Bankruptcy Court in Manhattan.

The fund’s owners include Future Capital Partners Ltd., a London-based investment company, and Capital Screen International, a Beverly Hills-based company.

One of the primary reasons for the company’s current liquidity concerns is its inability to collect on loans made to companies controlled by film producer David Bergstein and his one-time partner Ronald Tutor, according to the filing.

Since February 2007, Aramid made 36 loans to companies owned or controlled by Bergstein for a total of approximately $62.7 million. By January 2010, it had recovered approximately $20 million, leaving more than $42 million outstanding, the filing said.

Aramid prevailed last summer in a dispute with Bergstein, who had filed suit against Aramid in January 2012. Bergstein had claimed the company breached its agreement stemming from a loan settlement and causing his companies to go into involuntary bankruptcy. A call to Bergstein’s attorney was not immediately returned.

Chelin Pamela (2014 June 16) Film, TV Financing Hedge Fund Aramid Entertainment Files for Bankruptcy. Retrieved on June 19, 2014 from thewrap.com