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Private’s Internal Tussle Makes NY Post: Berth Milton “Systematically Looted the Coffers”?

Looks like Berth Milton’s biggest mistake was taking Private public.

from – Europe’s long-reigning porn king may soon be dethroned.

Berth Milton Jr. — the flaxen-haired son of a Swedish photographer who was widely credited with creating hard-core pornography in the 1960s — is facing a rebellion from investors amid accusations that he has systematically looted the coffers of his global smut factory to fund a lavish lifestyle.

Shareholders and creditors of Private Media Group — a Nevada-based, publicly traded porn empire built by Milton and his father — have charged in a lawsuit that Milton “has drained the financial lifeblood” out of the once-thriving company, even as it battles legions of upstart smut peddlers on the Internet.

Among the alleged shenanigans cited in the suit:

* Milton has improperly borrowed more than $10 million from Private during the past decade, and “not a penny has been paid back.”

* The porn king has been forcing Private to pay his personal legal bills as he fights a protracted tax battle with the Swedish government.

* Milton awarded himself a $600,000 salary without the board’s approval.

A coup erupted last month after Milton abruptly fired CEO Ilan Bunimovitz. In response, Bunimovitz has joined the lawsuit, charging his ouster was “retaliation” for an investigation he launched into charges of self-dealing by Milton.

Neither Milton nor Bunimovitz could be reached for comment yesterday.

Last week, a Nevada judge blocked Milton and other board members from an alleged scheme to issue additional shares to Milton, which would have given him a controlling stake while severely diluting other shareholders.

“There is a pattern of Milton doing whatever he wants and then getting members of the board . . . to figure out a way to justify it after the fact,” the investor suit alleges.

Private saw its business peak in the late 1990s and early 2000s as it staged big-budget skin flicks in exotic locales, such as the Pyramids of Egypt and the beaches of Rio de Janeiro.

Milton “was the first to create a [porn] studio brand and associate it with quality,” according to one industry executive.

“When a DVD had a picture of a beautiful blonde on the cover who looked like a super-hot model, she was actually in the movie” — a promise that isn’t typically fulfilled by most porn producers.

But more recently, Private has been caught off-guard by a craze for “reality-based” porn, whose low-budget productions are far more profitable and have taken better advantage of the Internet.

Rather than respond with better content, investors are complaining that Milton has become distracted by fruitless and costly initiatives, such as a proposal to build a hotel chain aimed at swingers.

A hearing on the suit is set for Sept. 3 in Las Vegas.

The suit alleges that Milton:

* Took out more than $10M in unpaid loans from the company
* Gave himself a $600K salary without board approval
* Fired CEO Bunimovitz for investigating allegations of “self-dealing”


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