Press Relase Intertainment AG
Witness admits budgets systematically inflated by Franchise
Third week of trial relating to compensation for damages of Intertainment begins
Ismaning near Munich, May 4, 2004 - The trial relating to compensation
for damages of Intertainment AG, Ismaning near Munich, against American film
producer Franchise Pictures and others is today, Tuesday, going into the third
week of the hearing. The first witness to testify will be Elie Samaha, CEO of
Franchise Pictures. He was already in the witness stand last Thursday, the
preceding day of the trial.
During the course of the trial, important witnesses have testified how Samaha,
Franchise Pictures - and in some cases also the business partners of the company
- proceeded when doing business with films. It was confirmed that Franchise
Pictures systematically and fraudulently inflated budgets. This was elaborated
by James Holt, Vice President of Franchise Pictures responsible for production
and finance. He said that on the instructions of Elie Samaha he had inflated the
actual production costs for the disputed films - and did not sent Intertainment
any film budgets without first consulting with Elie Samaha, in order to
establish by what amount he should inflate the actual film budget.
Holt also admitted that the inflated budgets were not only submitted to
Intertainment, they were also forwarded to other foreign distribution partners
of Franchise. This involved a total of 16 companies. This admission indirectly
contradicted the arguments put forward by the lawyers of Franchise Pictures. As
anticipated, they are maintaining in the trial that Intertainment had from the
outset known about and approved the fact that Franchise Pictures were invoicing
Intertainment with inflated budgets.
Holt also admitted that the insurance companies which issued the completion
bonds for the films had received both the actual and the inflated budgets from
Franchise Pictures in advance. In this connection, Intertainment's lawyer Scott
Edelman demonstrated by submitting documentation that the insurance companies
confirmed the inflated budgets to Intertainment, although they had only provided
insurance cover for the actual, much lower budgets.
Intertainment filed a lawsuit against its former partner Franchise Pictures on
account of fraudulently inflated film budgets for numerous films, involving
compensation for damages of at least 100 million dollars. The trial is being
held in Santa Ana near Los Angeles. The judgment should be handed down at the
latest on June 11.
Contact:
Intertainment AG, Dr. Marietta Birner, 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