Press Release of Intertainment AG
Intertainment anticipates arbitration proceeding against Comerica Bank and
bond companies
Adequate resources for the proceeding / Rüdiger Baeres steps down as Chairman of
the Board of Management at the Annual General Meeting and moves to the
Supervisory Board
Ismaning near Munich, October 29, 2004 - Intertainment AG, Ismaning near Munich,
sees good opportunities for successfully bringing final closure to the Franchise
Pictures case. This was the conclusion of the outgoing Chairman of the Board of
Management Rüdiger Baeres at the Annual General Meeting of the company.
Following the successful outcome to the lawsuit in the USA against Franchise
Pictures, 16 other companies, and personally against Elie Samaha, CEO of
Franchise Pictures, an arbitration proceeding against the other companies
involved in the fraud is scheduled to commence at the beginning of next year.
These include Comerica Bank and bond company Film Finances. Baeres commented
that the arbitration proceeding was the second and decisive hurdle that
Intertainment needed to cross in order to assert its claims. The arbitration
proceeding entails Intertainment demanding damages amounting to at least 100
million dollars, as in the trial that has already taken place against Franchise
Pictures.
Baeres also explained the liquidity situation of Intertainment in connection
with the fraud case. He stated that at the end of September, Intertainment held
liquid assets amounting to 1.4 million euros compared with 1.0 million in the
middle of the year. The Chairman of the Board of Management commented that from
today's perspective, the company had sufficient resources to continue operating
business and to pursue the arbitration proceeding. He also stated that
litigation in connection with the fraud case had cost Intertainment 12 million
dollars to date.
The judgment handed down against Franchise Pictures, the 16 other companies and
Elie Samaha in June 2004 granted Intertainment claims amounting to 121.7 million
dollars against Franchise Pictures, the 16 other companies and Elie Samaha.
Franchise Pictures and 15 of the other companies found guilty of fraud filed for
insolvency pursuant to chapter 11 of the US Insolvency Law after the judgment
was executed in August 2004. The current status of insolvency proceedings was
that Franchise Pictures had to submit a restructuring plan by the end of
December 2004. If the plan was not approved, Franchise would go into liquidation
at the end of February 2005, explained Baeres. He went on to say that at the
present point in time, it was clear that the company was not an empty shell but
had assets available. In addition, significant assets were subject to
unauthorized transfer from Franchise Pictures before the trial commenced.
Baeres stated that Elie Samaha had not filed for bankruptcy. He continued that
Intertainment had instituted all the necessary measures to enforce the judgment
against him. In this connection, a hearing would be held on December 6 at which
Samaha would have to disclose all his assets. Enforcement could then be
implemented immediately afterward.
Baeres continued by informing the meeting that settlement negotiations relating
to all the parties involved in the case had failed. Comerica Bank had proposed
such negotiations immediately after the judgment was handed down against
Franchise Pictures. The negotiations were held in San Francisco in midSeptember
but they only resulted in a settlement offer that was unacceptable to
Intertainment.
After concluding his presentation to the Annual General Meeting, Baeres -
founder and biggest shareholder in Intertainment - stepped down from the
Chairmanship of the Board of Management in order to take up an appointment on
the Supervisory Board of the company.
Contact:
Intertainment AG, Investor Relations, Osterfeldstrasse 84, D-85737 Ismaning, Germany
Tel.: + 49 (0)89 21699-0, Fax: + 49 (0)89 21699-11
Internet: www.intertainment.de, E-mail: investor@intertainment.de