In the end, it was personal.
Wednesday's jury verdict infavor of Intertainment Licensing versus Franchise Pictures was a stunningvictory for Intertainment CEO Rudiger "Barry" Baeres in his nearly four yearbattle with one-time close friend turned courtroom adversary, Franchise CEOElie Samaha.
The front page stats willshow that the seven week federal civil trial in Santa Ana, California resultedin Intertainment getting a jury award for compensatory damages of $77.1 millionin its fraud and breach of contract claims against Franchise and Samama, claimsthat involved budget pumping on The Whole Nine Yards, Get Carter and 13 other films produced by Franchise from 1999 to 2001. For thesefilms, Intertainment had agreed to pay 47% of the production budgets inexchange for pan-European rights.
The jury rejectedIntertainment's conspiracy claims against Franchise, and, in a move thatelicited a relieved gasp from Samaha, rejected a possible $345 millionracketeering claim against Samaha.
Intertainment also receivedanother victory when the jury rejected Franchise's claims that Intertainmenthad failed to honor the conditions of a July 2000 term sheet.
On Thursday, the jury willbegin considering punitive damages after a hearing in which Franchise lawyersclaimed they will call Samaha to testify. Also in Thursday's hearing, bothsides are expected to tangle over the jury verdict that only Franchise PicturesLLC has to pay the $77.1 million award - not Samaha. Intertainment lawyer ScottEdelman told Screendaily that he will argue that Samaha - who the jury foundliable for fraud - must also chip in on the damage award.
For Baeres, the juryannouncement resulted in the usually stoic German warmly embracing lawyerEdelman, who came on to the case shortly after Intertainment USA presidentStephen Brown began investigating budget discrepancies in the Franchise slatein September of 2000.
Savoring the victory on thecourthouse steps, Baeres told Screen that, "It's been a long three and a halfyears since we filed this lawsuit'The verdict represents a vindication for ourshareholders who have consistently put trust in Intertainment."
Earlier this year, Baeresannounced that, after forsaking the Intertainment original business plan ofrights trading, he was calling off the two-year co-production deal he hadforged with Kopelson Entertainment after the completion of one film, Twisted.
Baeres took the riskyapproach of effectively shutting down his business to concentrate on thelawsuit. Throughout the trial, Brown, his head of US operations,sat nextto him, often joined by the Intertainment CFO and the company's generalcounsel, both of whom left the German headquarters to come to Santa Ana.
Samaha's Franchise operationwas still making movies during the litigation. Samaha's relationship withlender Comerica Bank continues, as does his deals with domestic distributorWarner Bros.
Samaha quickly left thecourtroom Wednesday after the verdicts were announced, pausing only to tellScreen: "I'm going to work. I've got to make some movies. And I wish Barry luckcollecting from Franchise."
The odds againstIntertainment actually collecting any damage award from Franchise remainssteep. Franchise owes millions to its bank, Comerica, which is in firstposition to recover any income from the Franchise slate. Intertainment hasalready settled with Andrew Stevens,Samaha's former minority partner inFranchise, for $1 million.
Intertainment lawyers claimthey're not sure what part of Franchise Samaha still owns. Samaha gave a partof his company away to two Los Angeles construction magnates in exchange forpaying Samaha's multi-million dollar lawyers' fees.
But neither Franchise norSamaha was ever the deep-pocket target of Baeres. Intertainment is taking onComerica and bond company Film Finances in an upcoming arbitration hearing inwhich Baeres will argue that the defendants engaged in the fraud with Samahaagainst Intertainment. The other bond company in the arbitration, WorldwideFilm Completion, has declared bankruptcy.
On the other side, Comericais expected to argue that Intertainment owes the bank $72 million in defaultedcash payments tied to the Franchise slate of movies.
And Samaha's lawyer WilliamPrice says that the grudge match between his client and Baeres is far fromover.
"We were fighting with ourhands tied behind our backs," said Price. "The judge wouldn't let us put inevidence that showed how Baeres was pumping the budgets to his subdistributors.It's miraculous that the verdict resulted in [Samaha] not being liable for damages.And we'll appeal the other verdicts."