Investors sue film financier David Molner, alleging misappropriation of funds

Film financier David Molner has been hit with a lawsuit by investors who've accused of him fraud and breach of contract.

In a complaint filed in Los Angeles Superior Court this week, investors alleged that Molner plundered a Cayman Islands-based film fund he controlled, Aramid Entertainment Fund Ltd., and used it as a "personal piggy bank for himself and the entities he controlled." Aramid was established in 2006.

The lawsuit alleged that Beverly Hills resident Molner and his associates hid Aramid's financial woes from auditors and took out more than $60 million from the fund to pay fees to themselves and make loans to entities they controlled. The "looting" left the fund in such dire shape that it was delisted from the Cayman Islands Stock Exchange in March.

Molner did not return calls seeking comment.

The suit was brought by Cayman Islands-based Wimbledon Financing Master Fund Ltd. and Stillwater Market Neutral Fund III SPC, which also named Molner's Screen Capital International as a defendant.

Molner's Aramid fund has financed a number of movies made by embattled producer David Bergstein, including the recently released "Love Ranch" with Helen Mirren.

-- Richard Verrier

Comments

[Jennifer R]

Something didn't make sense, with David Molner and his $250 million Aramid fund making a full-time job out of spearheading an expensive legal attack on the insolvent Thinkfilm, over a claim for less than $100 thousand; it seemed out of whack (unless there was some personal blood feud going on). Then in June, the court held a hearing to delve into details about Molner having paid $100 thousand to opposing counsel -- the general counsel of Thinkfilm (Ms. Tregub), for her to turn over files to Molner - even more strange! Why would Molner do all of that -- bribing an opposing party's lawyer just to collect a small bill?

This new lawsuit lays out the facts -- Molner's investors were in revolt the past half year, trying to stop him from making loans to his own entities. So he attacks Bergstein and Thinkfilm, to show he is a good money manager? And ignores or writes off, 4 huge defaulted loans that he caused Aramid to make to himself? Sounds like an old story, told many times. The psychological profile of this Molner guy will end up as a movie - can't wait!

[Ronald Richards]

Can someone email the lawsuit to me so I can comment on it? ron@ronaldrichards.com

[Mark]

From what I can see, the only thing that has been filed so far is a pleading by a couple of funds for which no public information (not even, apparently, a website of any sort) can be found. Molner/ Aramid will answer, and my bet is that this action disappears like a puff of smoke. It has the look to me of a speculative lawsuit launched in the hopes that busy defendants will write a check to make it all go away.

[bob]

what is the follow up to this story? This deserves further investigation.

would like to know how Molner has made so much money off this fund when all the movies he invests in our losers.

[bob]

type: "our" should be "are"

[Oliver]

Well he sure lives well:
http://losangeles.blockshopper.com/property/4341001018/715_n_sierra_drive/

and what is interesting to me is that this house was sold to Mr Molner (and Mrs Molner) by some Trust that is registered in the Caymen Islands. A very interesting coincidence, in my opinion.

[John K]

.. doesn't look speculative ... BHills house from a cayman islands company..when your whole business revolves around tax and offshore companies in the Caymans ..questionable.....film structures were quite common in europe as a means of avoiding income tax..a lot of private investors got scammed...the main vehicle of one of the founders of AEF is tax avoidence structures for the UK..search for Aramid Aramidcapital and Future capital..more to this one