One of the longest andugliest legal fights in independent film business history took yetanother stunning turn on Thursday when the former co-managing director and leadcounsel for Intertainment Licensing attempted to virtually destroy the case ofhis one-time boss, Intertainment CEO Rudiger 'Barry' Baeres.
"I'm here to make sure justice is done", said formerIntertainment lawyer David Williamson as he testified as a friendly witness forFranchise Pictures in a Santa Ana, California federal courtroom.
When asked by Franchise lawyer William Price when Baeresknew that there was a scheme where CEO Elie Samaha and his Franchise cohortswould show Intertainment wildly pumpedbudget figures for such films as TheWhole Nine Yards and Get Carter,Williamson replied, "I think Barry always knew about the two budgets that werefloating around."
Since he sued Franchise in December of 2000, Baeres hasclaimed to lawyers, the press, and now a jury that it wasn't until September of2000 - 16 months after he began contributing 47% of the production budgets fora slew of Franchise films that he had any idea that Franchise was showingIntertainment an artificially high budget while showing its lender ImperialBank (now Comerica) and its completion bond companies much lower budgets thatreflected the real production costs.
Williamson, an American lawyer who moved to Munich to workfor Baeres from 1993 until he was terminated by Baeres at the end of 2001, saidthat he first suspected the budget figures Franchise submitted in early 1999for the film Battlefield Earth.
The suspicion only grew, according to Williamson. "Thebudgets were a concern on every film we did with Franchise. I didn't think theywere reliable," said Williamson, who added that he would complain to Baeres,but the matter would be dropped after Baeres had a private conversation withSamaha.
Williamson, who was in charge of overseeing the financialdocument process, termed the budget submission process at Intertainment as"pretty much a mess."
Williamson told the jury that it wasn't just the budgetsthat Baeres was agreeing to that caused him alarm.
"I was never comfortable with the higher numbers that Barrywas putting on the sales sheets [shown to Intertainment sub-distributors],"claimed Williamson. "I also thought it was wrong when he would inflate thebudget numbers in the annual reports to stockholders."
Williamson saved his most damning testimony in describingthe mood at Intertainment in September of 2000 when Intertainment was facedwith the prospect of funding output deals with Franchise and KopelsonEntertainment.
"[Our chief financial officer] was very concerned about cashflow," said Williamson. "Barry wanted to convert the Franchise output deal to afirst look deal. He said that discovering the fraud [by Franchise] was a wayout of the agreement, and it was a benefit, rather than a bad thing."
Samaha, who admits to the budget fraud while claiming thatBaeres was in on the fraud from the beginning of their relationship, said in aninterview to Screen International that Williamson's testimony is indicative ofthe differences between him and Baeres.
"I'm not clean on this deal I did with Barry," said Samaha."He gave me a bunch of stock from his mother that grew to $12m or $15m, and I got it through my Swissaccount. But whenever I fuck with someone, I'm upfront about it."
(According to 1999 German security rules, Samaha, as anAmerican citizen, was not supposed to receive Intertainment pre-IPO stock atfriends-and-family prices.)
The trial resumes on June 8.