To paraphrase the great Travis Bickle, my copy was like a real rain that had come to wash the filth off the streets.
And since when was being a “magazine writer” a federal crime?
But Berg, who’s now the editor of the paper, was just speaking the truth. Looking back on the whole pile of hysterical Hollywood bullshit, the story of Samaha, Baeres and Stevens was so over-the-top that any tale about their then-pending litigation that went all gonzo/Wolfe/Talese on their asses would have been like the gasoline fight in “Zoolander.”
Lots of fun while it lasted, but then....BBOOOOOOOOOOOOOOOOMMMMMMM!
Now, great reader of this web site, the stories I wrote on Samaha back in 2001 have been released from the musty corners of the Daily Journal pay archive. Thank you, D.J.
The surreal part of the tales you are about to read is that for five weeks in a Santa Ana federal courtroom in 2004, a civil jury had these two stories shoved into their eyeballs by $500-an-hour lawyers. By that time, three years after the case was first filed, nobody cared about Samaha and Baeres except Janet Sphintz, the law reporter for Daily Variety, and me, who actually thought a Samaha trial would be an entertaining bitch of a courthouse brawl.
The trial was worse than an anal probe. Imagine being in a courtroom for five friggin’ weeks listening to accountants describing the rules of bonded film budgets, bank notices of assignment, and German stock market reporting (or lack thereof). Then there was Elie Samaha telling jurors they had a lifetime pass to the V.I.P. room at White Lotus if they would just follow their hearts.
The jury laughed at Samaha’s jokes for five weeks, deliberated for a day and a half, and hit Samaha and what was left of his Franchise Films for $106 million in compensatory and punitive damages for pumping the film budgets that Baeres was obligated to pay 47 per cent of.
I was stunned. I knew the real Baeres, a German film rights trader whose company was worth $2 million back in February 1999. But, five months later after going public on Frankfurt’s Neuer Markt, Baeres’ Intertainment Licensing GmbH hit a market cap of $1.3 billion by promising investors that Intertainment would have the European rights to a sixty-film library to be produced by the highly talented and well-respected Hollywood producer, Elie Samaha.
Back in Hollywood, we knew Samaha as the former doorman who had made his bones running the V.I.P. rooms at the Roxbury and the Sunset Room and supplying party favors for Sly Stallone, John Travolta, Kevin Costner, Wesley Snipes and Bruce Willis. Now, according to Baeres and his press releases that still sit on the website www.intertainment.de, Franchise was going to make highly-commerical films with Samaha's late-night buddies.
First up on the slate was Travolta’s “Battlefield Earth.”
Before his stock investors woke up and smelled the kraut, Baeres put $185 million of their money into the worst slate of films to hit Hollywood since Ed Wood. In September of 2000, Baeres owed a total of $170 million on cash guarantees and letters of credit that would be soon payable to Imperial Bank in Los Angeles and HypoVereinsbank in Munich, this as Samaha’s awful films were being delivered one after another for European release. And the Neuer Markt, which had thrown all that funny money Baeres’ way, was crashing.
That’s when Baeres said that Samaha was not the next Louis B. Mayer, rather, he was a thief who had slipped him phony, inflated budgets and cheated Intertainment out of $75 million. Baeres said that Imperial Bank (now Comerica Bank) was in on the fraud. He told his investors that Samaha and Imperial were able to do this because Baeres was a naïve, but honest, German who had given Samaha that $185 million with no oversight. “I was never allowed to see any bank budgets or production cost reports,” Baeres wailed later in court.
“Yeah, I pumped the budgets,” Samaha replied in the witness box. “How else was I going to get my slate financed?” Samaha almost said “piece-of-shit slate financed,” but didn’t leave out this part:
“There was no fraud. Baeres knew I was pumping the budgets, but didn’t care. He’s a stock promoter. His job is to sell air to greedy investors who will buy anything that’s rising. At least I made the movies.”
The mistake that Samaha made was treating the trial like an inconvenience. Baeres, who paid trial litigator Scott Edelman of Gibson, Dunn & Crutcher $15 million with the last of his shareholders' money, showed up every day of trial with a Teutonic intensity that let the jurors know that there was at least one side in the fight who took it seriously.
At the end of the day, Samaha may have been no more or no less than an honest thief. If you don’t believe me, check on how the arbitration is going between Intertainment and Imperial/Comerica Bank, in which Intertainment is trying to convince an arbitrator that the theory Baeres gave the civilian jury -- that Samaha's bankers participated in an international conspiracy -- was honest and true.
It’s going nowhere, because Intertainment is taking on the bank lawyers for Comerica, who’ve had five years to figure out where the bodies are buried in Germany.
But don’t ask Baeres. Just after the Santa Ana jury verict in 2004 that seemingly verified that Samaha was the dastardly villian that brought a great German company to its knees, Baeres resigned as the Intertainment CEO. He’s now on Intertainment’s “supervisory board” and has moved to Los Angeles. His last public statement heralded the jury verdict in the 2004 trial, and briefly noted that the debt from Franchise might be hard to collect because Franchise is bankrupt.
But check that website out at Intertainment, because there’s hot news that Intertainment is confident that the same $106 million that’s due from the Franchise lawsuit will be matched by the money that will come in from the Comerica Bank arbitration.
Any day now.
These letters of credit were issued by the lending division of HypoVereinsbank to Intertainment while Baeres and stock touts at HypoVereinsbank on March 20, 2000 were trying to justify Samaha's brilliance and the afore-mentioned 60-film slate -- this while Baeres was selling the Franchise film rights to his Euro customers at less than what he was contracted to pay Samaha for those rights.
No one should feel sorry for Samaha just because he took money from Germans who never heard of conflict-of-interest disclosure laws. However, even if Samaha hadn't pumped the budgets on the Franchise films, Baeres' business plan was upsided down from the moment he sold it to investors during the height of the German stock market gold rush.
Baeres deserves one more kudo for his ability to stick to a story. A year after he put Samaha six feet under in the Santa Ana courthouse, Baeres got an accounting firm, KPMG, to list $75 million of the uncollected jury award against Samaha/Franchise as an asset. But KPMG missed the $14 million of bad HypoVereinsbank debt when it ran the numbers for Intertainment's 2005 balance sheet that was released to shareholders. This all came down after Baeres had tried to get HypoVereinsbank to forgive the bad debt by telling any reporter who would listen, and the Santa Ana federal jury, that HypoVereinsbank was in on the international conspiracy to deny him access to Samaha's pumped budget information.
But that's another story for another day.