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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): April 7, 1997
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J2 COMMUNICATIONS
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(Exact name of registrant as specified in its charter)
CALIFORNIA
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(State or other jurisdiction of incorporation)
California 0-15284 95-4053296
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State of Commission I.R.S. Employer
Incorporation File No. Identification No.
10850 Wilshire Blvd., Suite 1000
Los Angeles, California 90024
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(Address of principal executive offices)
Registrant's Telephone Number: (310) 474-5252
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ITEM 5. OTHER EVENTS
As previously reported in the Annual Report for the fiscal year ended
July 31, 1996, J2 Communications (the "Company" or the "Registrant") has been
engaged in negotiations with the Harvard Lampoon, the purported licensor of the
name "National Lampoon", with respect to certain accounting and royalty issues.
On or about March 13, 1997, the Harvard Lampoon notified the
Registrant and its special counsel, pursuant to a letter dated March 10, 1997,
that it was requesting mandatory arbitration of its claims that, inter alia,
the Registrant had:
(i) under-reported approximately $221,000 of royalties, and in
connection therewith, should be required to report royalty income "at source"
from its sub-licensees rather than on the income, if any, which the Registrant
received from such sub-licensees;
(ii) failed to see formal approval of the Harvard Lampoon to enter
into sublicense agreements in certain territories;
(iii) failed to publish, on an annual basis, sufficient quantities
of the magazine National Lampoon to maintain the license from the Harvard
Lampoon.
After such notification, the Registrant and the Harvard Lampoon
commenced negotiations to refer these matters to non-binding mediation in the
presence of a professional mediator. On or about April 7, 1997, the Registrant
and the Harvard Lampoon agreed to the appointment of a mediator who will
preside over a mediation to take place in New York on May 8-9, 1997. There
currently is no date set for the arbitration.
The Registrant believes the claims of the Harvard Lampoon are wholly
without merit and intends to vigorously defend itself. In particular, the
Registrant believes it has completely adhered to the requirements regarding the
publishing of National Lampoon, and that the accounting method which the
Harvard Lampoon wishes the Company to utilize is neither required pursuant to
the terms of the Registrant's 1983 agreement with the Harvard Lampoon, nor
consistent with the reporting of the sales and royalties during the past 27
years of operations thereunder, including under predecessor agreements.
Moreover, the Registrant has reserved the right to assert that the Harvard
Lampoon has abandoned its rights to the "Lampoon" trademark by operation of
law.
Although the Registrant believes that it has meritorious defenses to
the claims of Harvard Lampoon, the loss of the Registrant's license with respect
to the "National Lampoon" would have a material adverse effect on the
Registrant's business and prospects. A significant portion of its assets, as
well as the vast majority of its revenue, is derived from the exploitation of
the "National Lampoon" trademark.
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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 thereunto duly authorized.
J2 COMMUNICATIONS
Date: April 18, 1997 By: /s/ JAMES P. JIMIRRO
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Its: President
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