Swedish Film Giant Continues to Evade Millions in U.S. Fines; Ignores $2,500 Daily Contempt of Court Fees, Says Isis Litigation, LLC

Swedish Film Giant Continues to Evade Millions in U.S. Fines; Ignores $2,500 Daily Contempt of Court Fees, Says Isis Litigation, LLC

Film catalogue of iconic director Ingmar Bergman in limbo as Svensk Filmindustri declared outlaw by U.S. court; Isis offers bounty on website for royalties

ASPEN, Colo., July 23 /PRNewswire/ -- It has been just over a year since the death of master Swedish filmmaker Ingmar Bergman. But in the United States, there have been no retrospective showings of Bergman's films in theaters, as one would expect. In fact, you'd be hard-pressed to see a Bergman film anywhere in the U.S., either on TV or in theaters.

The surprising reason why stems from a court case in Colorado that illustrates the ugly side of foreign business partnerships -- and what can happen when a foreign company opts to evade more than $8 million in court-ordered fines.

Svensk Filmindustri, the leading company in Sweden and part of the Bonnier Group entertainment and media conglomerate, owns the Ingmar Bergman catalogue. Ten years ago, Svensk began developing upscale theaters in resort locations. The concept was that visiting tourists would pay higher ticket prices to go to the movies at these premier locales. Svensk guaranteed the lease for the first theater in what it hoped would become a chain: the Isis Theater in Aspen.

Svensk's concept failed. And when Isis sought to collect on its guarantee, Svensk balked. The courts ordered Svensk to pay, and Svensk refused. Without domestic assets to seize, Isis has been unable to collect on its judgement, as U.S. courts have no authority to enforce it internationally.

"The complete disregard Svensk has shown for the laws and courts of this country is shocking -- running from judgement, defying court orders, and hiding assets to avoid its obligations while it and its corporate owners reap millions of dollars in profits from the United States," said Jack Smith, a partner of Holland and Hart in Denver, who represents Isis in the case. "Maybe this is the grim face of what foreign ownership of businesses in this country is leading to. But they've got money and assets, and eventually we'll get them."

Isis is now offering a reward in response to Svensk's efforts to avoid further garnishments by changing the terms of its U.S. business arrangements. Information about the reward can be found at www.GarnishSvensk.com, which will soon feature a ticker display -- updated daily -- of how much Svensk owes Isis. The reward stipulates that if new information is provided to Isis that results in a collection of Svensk's royalties, the informant will receive 10 percent of the revenue captured, up to a maximum of $100,000.

Meanwhile, Svensk has now literally gained outlaw status in the U.S. as a result of an order issued by Colorado District Court Judge Denise Lynch.

In 2003, Isis was awarded a judgement for over $5.9 million from Svensk, to which was later added $850,000 in costs and fees. Svensk has never paid this, however, and with interest, it now owes Isis more than $8.9 million.

Recently, the stakes of the litigation were raised significantly when Judge Lynch held Svensk in contempt of court and fined the company $2,500 a day -- over $900,000 a year -- for disobeying a court order requiring it to disclose its assets to Isis so that the judgement could be enforced.

Mr. Smith has also been authorized to depose officials from Svensk's parent, Bonnier Entertainment and Broadcasting, a wholly owned subsidiary of Bonnier AB, the ultimate parent company. Bonnier owns more than 40 major U.S. magazine titles, many of which it purchased from Time Inc. for more than $200 million in 2006.

"We will now depose Terry Snow, the CEO of the Bonnier publishing interests in the U.S.," says Mr. Smith. "Ironically, we understand Snow has time share interests in Aspen and visits regularly. Jonas Bonnier, the overall CEO of the Bonnier Group who is also the Chairman of the Board of the U.S. Bonnier entities, has visited the publishing office in Boulder and is likely to do so again. We will find out when he is visiting and serve him with a subpoena while he is here."

Thus far, www.GarnishSvensk.com seems to only have made Svensk more reluctant to show its films at all in the U.S. This explains why there were no tributes or film festivals for Ingmar Bergman when the film giant died last July.

"It is inconceivable that any legitimate business would conduct itself this way and subject its senior executives to such a level of embarrassment over an issue that has been so thoroughly litigated and decided, with all appeals rejected by the Colorado courts," says Mr. Smith. "We are not accustomed to this sort of cat-and-mouse game, and we are not happy that we have to pursue it."

ABOUT THE ISIS JUDGMENT

1997. Isis, LLC leases the Isis theater in Aspen, Colorado to Resort Theaters of America, agreeing to develop the historic building into a state-of-the-art five-plex cinema. To convince Isis to commit to this costly development project, Svensk Filmindustri, a part owner of RTA, guarantees the lease. Svensk previously invested in an American theater chain called First International Theaters, which it sold at a profit. RTA opens the Isis theater in 2000.

2000. RTA ceases operations, files for bankruptcy and rejects its lease. Svensk refuses to pay on the guaranty, claiming that Torsten Larsson, then Svensk's CEO (who became its Chairman of the Board and now is head of all entertainment for Bonnier), didn't have authority to sign and Svensk wasn't bound.

2001. Carl-John Bonnier, Chairman of Svensk's parent, the Bonnier Group, acknowledges in an e-mail to Isis that Svensk "made a guaranty."

2002. Court issues decision finding Svensk liable on the guaranty to Isis.

2003. Isis is awarded a judgment for over $5.9 million, to which was later added $850K in costs and fees for a total of about $6.8 million. The judgment balance with interest is now about $8.5 million.

2003. Svensk appeals the judgment, which is later affirmed in full by the Colorado Court of Appeals and the Colorado Supreme Court.

2007. The Colorado Court of Appeals issues a decision requiring Svensk to answer interrogatories about its assets and financial affairs, which Isis submitted right after the entry of the judgment and which Svensk refused to answer. Svensk is trying to take this decision up to the Colorado Supreme Court, continuing its pattern of resisting every legitimate effort to enforce the judgment. Svensk also has taken action to block a judgment debtor examination in California of its VP for international sales, who was served with a court order in L.A. Svensk has never paid any part of the judgment, but Isis has collected around $200,000 by garnishing Svensk's contracts with several U.S. film companies, including Sony, Janus Films, and MGM. Svensk has actively resisted and obstructed all efforts to enforce the judgment and obtain information about its assets.

2008. Colorado District Court Judge Denise Lynch finds Svensk in contempt of court and fines the company $2,500 a day for disobeying the court order requiring it to disclose its assets to Isis.

ABOUT SVENSK AND BONNIER

On its and Bonnier's websites and in other documents, Svensk claims to be one of the world's oldest and most reputable film companies:

"Svensk Filmindustri

Svensk Filmindustri is one of the world's oldest and most reputable film companies. Since its start in 1919, the company has built up a reputation for having produced some of the worlds most well-known films, worked with internationally renowned actors and directors, and accumulated a collection of rights to over 1,200 titles. SF is also the leading distributor of film and video in Scandinavia."

Svensk's parent, Bonnier, a European media conglomerate, just entered the U.S. publishing market in a big way, buying about 40 magazines from Time Warner for more than $200 million and among other US assets had previously bought the specialty publisher Weldon Owen.

Contact: Axiom Communications
James A. Quirk
201-348-8998

First Call Analyst:
FCMN Contact:

Source: Isis Litigation, LLC

CONTACT: James A. Quirk, Axiom Communications, +1-201-348-8998

Web site: http://www.garnishsvensk.com/

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