Bergstein's Capitol sues to recover $20 million loss on 'Black Water Transit'

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Bergstein's Capitol sues to recover $20 million loss on 'Black Water Transit'

Tue Dec 15, 2009 @ 01:17AM PST

By Matthew Belloni

Bergstein We've become so used to seeing indie film mogul David Bergstein's ThinkFilm and Capitol Films pop up as defendants in lawsuits that we flinched a bit at a filing Monday listing Capitol as a plaintiff in a breach of contract and negligence action. 

Capitol is suing insurance broker Aon for losses incurred on the unreleased "Black Water Transit" when star Samuel L. Jackson had to drop out a month before shooting due to a back injury. Jackson was an "essential element" of the film but Aon allegedly had sold Capitol a policy that did not cover injuries of an "essential element" during pre-production. 

The insurance carrier, US Specialty Insurance Company, later sued Capitol for a court declaration that it wasn't require to cover any losses, and during the litigation Aon employees allegedly testified that they had never before seen a policy that failed to provide coverage during a film's pre-production phase.

Because it had no insurance coverage, Capitol says it was forced to recast the Jackson role (Laurence Fishburne ended up starring) and soldier on rather than abandon the film altogether and recoup its investment via insurance.  

"Transit" has been mired in problems. According to a November story by THR's Alex Ben Block, the film, directed by Tony Kaye, is no longer being shopped by Capitol despite being unveiled with fanfare two years ago at Cannes. The story says Kaye finished editing the film but Bergstein refused to take delivery, reportedly because he considered it unreleasable. "He sought compensation from completion bond company CineFinance, claiming the budget had ballooned to about $48 million, which could not be recovered," the story says.

Now Capitol is suing Aon to recover losses that allegedly exceed $20 million. The company alleges causes of action for professional negligence, breach of contract, negligent misrepresentation and breach of fiduciary duty.

Capitol is represented by Lucia Coyoca at Mitchell Silberberg & Knupp.

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The Hollywood Reporter, Esq. blog focuses on how the entertainment and media industries are impacted and influenced by the law. It is edited by Matthew Belloni with contributions from veteran legal reporter Eriq Gardner and others. Before joining The Hollywood Reporter, Belloni was a lawyer at an entertainment litigation firm in Los Angeles. He writes a column for THR devoted to entertainment law. Gardner is a New York-based writer and legal journalist. Send tips or comments to Matthew.Belloni@thr.com

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