UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 27, 1998
AMC ENTERTAINMENT INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-8747 43-1304369
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
106 W. 14TH STREET, KANSAS CITY, MO 64105-1977
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 221-4000
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Item 5. Other Events
On July 27, 1998, in the United States District Court for the Northern
District of California, Drexler Technology Corporation filed an action
against each of Sony Corporation and its affiliated companies and Dolby
Laboratories, Inc., and has included as defendants various motion picture
distributors and exhibitors, including American Multi-Cinema, Inc. ("AMC")
a wholly-owned subsidiary of AMC Entertainment Inc. (the "Company"),
Drexler Technology Corp. v. Sony corp. et al, C98-02936, and Drexler
Technology Corp. v. Dolby Labs. et al, C98-02935. These actions allege
infringement of two patents relating to optical data storage and retrieval
systems, which are allegedly infringed by the encoding of digital sound on
motion picture films. These infringement allegations are based on the
production, distribution and exhibition of film with Sony Dynamic Digital
Sound (SDDS) or Dolby Digital technology. Plaintiff seeks an injunction
against continued use of this technology and also seeks damages.
AMC currently utilizes SDDS systems with respect to 2,338 of its
screens and owns 136 portable systems employing Dolby Digital technology.
Pursuant to AMC's contractual arrangements with Sony Cinema Products
Corporation ("Sony Cinema"), a subsidiary of Sony Corporation of America,
Sony Cinema is obligated to indemnify, defend and hold harmless AMC from
and against any and all liabilities, damages, losses, costs and expenses
(including attorneys' fees) suffered or incurred by AMC in connection with
any third party claim for alleged infringement of any patent, trademark or
similar right relating to the SDDS systems. The agreement with Sony Cinema
provides that Sony Cinema at its expense and option, shall (i) settle or
defend against such a claim, (ii) procure for AMC the right to use the SDDS
systems in a manner that will cause them to perform as originally intended
under the agreement between AMC and Sony Cinema; (iii) replace or modify
the SDDS systems to avoid infringement; or (iv) remove the SDDS systems
from AMC's facilities (at such time and in such manner as to not disrupt
AMC's business operations) and refund to AMC the purchase price less
depreciation. The Company does not have similar contractual rights with
respect to the Dolby systems, however, these systems represent only
approximately 6% of the digital sound systems used by the Company. As a
result, although no assurance can be given, the Company believes that these
actions will not have a material adverse effect on the Company's financial
condition, liquidity or results of operations.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
AMC ENTERTAINMENT INC.
Date: August 5, 1998 By: /s/ Richard L. Obert
Richard L. Obert
Senior Vice President and
Chief Accounting and
Information Officer
