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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) MAY 28, 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.
Not Applicable
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not Applicable
Item 5. OTHER EVENTS
On March 22, 1996, the Banque National de Paris (Canada) (BNP)
provided financing to American Entertainment Limited (AEL), a wholly-owned
Canadian subsidiary of the Registrant, of a $5,000,000 US revolving line of
credit to be used to finance the accounts receivable and contract amounts
receivable of VIP Phone Club, Inc. (VIP), a private Delaware corporation, which
was part of an affiliated group, which, in November, 1995 and in January, 1996,
had assigned its accounts receivable and contract accounts receivable to AEL.
Additionally, the Registrant and AEL had granted a license to VIP to make
available to VIP's telephone subscribers the titles contained in the
Registrant's film Library. In December, 1996, the Registrant received a
notification from (BNP) of a default in the loan between VIP and BNP, of which
AEL is the debtor and the Registrant one of the guarantors. At that time, the
Registrant acknowledged this default on the part of VIP and agreed to cooperate
with BNP in securing the collection of the outstanding loan balance.
Notwithstanding the foregoing, on April 8, 1997, the Registrant informed BNP
that due to the conduct of BNP respecting both the loan to VIP and its Receiver
thereof, the Registrant and AEL by operation of law have been released
respectively from said guarantee of the Registrant and the loan to AEL. In
response to this notice, BNP denied the Registrant's allegations, 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 Registrant believes that there is no basis for such a
Receiver to be appointed and has opposed this motion. The matter has been
adjourned on the consent of BNP, the Registrant, and AEL until June 5, 1997. In
the interim, the parties have agreed to allow the accounting firm of Price
Waterhouse to act as a Monitor to perform a business review of the operations of
the Registrant and AEL. The Registrant believes, given the facts and
cirmcumstances of the case, that BNP should not be entitled to have a Receiver
appointed over the Registrant's property and assets. However, there can be no
guarantee of the outcome of this case at this time. In addition, the Registrant
has moved to severe all relations with VIP and is examining the possibility of
litigation against VIP and its affiliates, as well as against BNP with regard to
actions taken by VIP and BNP in regard to the VIP receivership.
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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.
Not Applicable
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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: May 28, 1997
