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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 24, 1997
AMERICAN ENTERTAINMENT GROUP, INC.
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(Exact Name of Registrant as Specified in its Charter)
Colorado 0-22174 83-0277375
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(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
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(Address of Principal Executive Offices, Zip Code)
(416) 920-1919
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(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.
See Item 5 below.
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not Applicable
Item 5. OTHER EVENTS
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).
The foregoing litigation arose out of the following events. On
March 22, 1996, BNP provided financing to AEG 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, 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
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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 matter was heard on June 5, 1997. 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 whatsoever nature and kind and wherever situate" (collectively
known in the Court Order as the Property) of the Registrant and AEL. While
the Property of the Registrant and AEL are under the control of the receiver,
the management of the Registrant remains with the Board of Directors. The
Registrant 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.
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: July 24, 1997
