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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
Date of Report (Date of earliest event reported) JULY 25, 1997
AMERICAN ENTERTAINMENT GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
COLORADO 0-22174 83-0277375
(State or Other (Commission IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation
or Organization)
160 Bedford Road, Suite 306
TORONTO, ONTARIO, CANADA M5R 2K9
(Address of Principal Executive Offices, Zip Code)
(416) 920-1919
(Registrant's telephone number, including area code)
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
Item 1. CHANGES IN CONTROL OF REGISTRANT.
Not Applicable
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
Not Applicable
Item 3. BANKRUPTCY OR RECEIVERSHIP.
On July 24, 1997, the Registrant filed for protection of Chapter 11
of the U.S. Bankruptcy Code. The Board of Directors took this step as a
direct result of the actions of the Banque National de Paris (Canada) (BNP)
and the VIP Phone Club, Inc. (VIP), a private Delaware corporation.
During the past year, the principal activity of the Registrant has
been the collection of the accounts receivable assigned by VIP to AEG
Entertainment, Limited (AEL), a wholly-owned subsidiary of the Registrant.
These activities have been carried out in the State of Maryland. BNP had
provided financing to AEL of a $5,000,000 US revolving line of credit to be
used to finance the accounts receivable and contract amounts receivable of
VIP, with the Registrant, among others, providing a guarantee on such
financing.
In December, 1996, the Registrant received a notification from BNP
of a default in the loan between VIP and BNP, and that BNP had commenced an
action in the State of Maryland against VIP. Subsequently, BNP commenced an
action in the Ontario Courts against the Registrant and AEL for payment of
the outstanding loan balance, and filed a motion in the Courts of Ontario
(Toronto) asking that a Receiver be appointed over the property and assets
for both the Registrant and AEL. The Ontario Court ordered the appointment of
the accounting firm of Price Waterhouse Limited as receiver, without
security, "of all the present and future undertaking, property and assets of
whatsover nature and kind and wherever situate." The Registrant has filed a
Motion to Intervene regarding BNP and VIP and the VIP receivership in the VIP
litigation which BNP commenced in Maryland. This Motion is still pending.
Additionally, On July 24, 1997, the Registrant commenced litigation in the
State Circuit Court for Baltimore County, Maryland against the Banque
National de Paris (Canada) (BNP), VIP Phone Club, Inc. (VIP), a private
Delaware corporation, and its affiliates, the Maryland litigation receiver in
the VIP litigation, Mr. Joel Katz, the owner of VIP and its affiliated
entities and certain of Mr. Katz's associates. The Registrant has asked the
Court for recision of the contractual relationship with BNP, including the
guarantee of the Registrant, or in the alternative, credit and interest for
amounts alleged to have been converted by BNP and its co-conspirators, and
for compensatory and punitive damages against the named defendants in the
amount of approximately $850 Million and for such other remedies as the Court
may deem appropriate based upon fraud, conversion, breach of fiduciary duty,
conspiracy, damage to the Registrant's business undertakings, and for
violation of the Federal Racketeering Statutes (RICO).
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As a result of BNP's actions, BNP has interferred with the
Registrant and its subsidiaries' cash flow, making it impossible for the
Registrant and AEL to meet their obligations in a timely fashion. The Board
of Directors therefore determined that it was in the best interests of the
Registrant to seek protection under Chapter 11 of the U.S. Bankruptcy Code.
The filing was commenced in the U.S. Bankruptcy Court for the Eastern
District of Maryland. The Registrant was granted status as
debtor-in-possession, subject to the supervision and orders of the Bankruptcy
Court.
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not Applicable
Item 5. OTHER EVENTS
Not Applicable
Item 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
Not Applicable
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Not Applicable
Item 8. CHANGE IN FISCAL YEAR.
Not Applicable
Item 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
As of July 21, 1997, the Registrant has sold a total of 200,000
common shares at prices ranging from $.10US to $.20US per share, in
cash, to two individuals, both of whom are residents of Canada,
pursuant to Regulation S.
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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.
AMERICAN ENTERTAINMENT GROUP, INC.
By: /s/ JOEL WAGMAN
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Joel Wagman
Chairman
Dated: July 25, 1997
