Press Release
Court Upholds Intertainment's RICO Claims Against Franchise, Samaha and Stevens
Franchise And Its Principals Face Potential Liability of Over $ 225 Million
Ismaning near Munich, May 23, 2002 - A federal district court judge today issued a ruling upholding the pleading of two of the three RICO claims brought by
Intertainment Licensing GmbH against Franchise Pictures and its principals, Elie Samaha and Andrew Stevens. RICO stands for "Racketeer Influenced and Corrupt
Organizations Act" and outlaws criminal acts which constitute a pattern of racketeering activity. It provides for treble damages and attorneys' fees.
In its lawsuit, Intertainment alleges that Franchise and its principals, submitted fraudulently inflated budgets to Intertainment, a European film distributor, on over ten pictures, which resulted in Intertainment paying sometimes nearly twice the 47% of each budget that the film distributor was supposed to pay in exchange for European distribution rights. Films at issue include "Whole Nine Yards", starring Bruce Willis, "3000 Miles to Graceland", starring Kevin Costner, "Get Carter" starring Sylvester Stallone, "The Pledge" with Jack Nicholson, and "Angel Eyes" with Jennifer Lopez, and are being distributed domestically and internationally by Warner Bros.
In addition to finding that a criminal enterprise had been appropriately pled against Franchise, Samaha and Stevens, the court also upheld the allegation of a criminal enterprise involving Imperial Bank (now Comerica Bank) and WorldWide Film
Completion, Inc., finding that "there are sufficient specific facts outlining third parties
Imperial Bank and WorldWide's involvement in the fraudulent scheme."
In particular, the court stated that "[t]he enterprise knew the inflated budgets would be presented to plaintiff, and the inferences, construed favourably to the complaint, suggest that third parties Imperial Bank and WorldWide had the requisite experience in funding and insuring film production that would allow them to recognize an inflated budget and participate in the computation of movie budgets and bonds."
Intertainment seeks in excess of $75 million in damages, but as a result of the ruling, Franchise and its principals now face treble damages of over $225 million plus
attorneys' fees. Intertainment CEO, Barry Baeres, praised the ruling as "carefully written and reasoned." "We are vindicated by the conclusion reached by the judge."
In other developments, on April 29, 2002, Intertainment sought to attach $25 million in Franchise assets, and to unseal the Franchise budgets it claims are phony but which Franchise has designated as confidential and has filed under seal so as to prevent public viewing. Those motions remain under submission, but a ruling is
expected soon. The trial is scheduled for November 19, 2002.
Contact:
Intertainment AG
Osterfeldstraße 84
85737 Ismaning
Phone: 0 89 / 216 99 - 0
fax: 0 89 / 216 99 - 11
Internet: www.intertainment.de
E-mail: investor@intertainment.de