Largest Creditor Releases The Entertainment Internet Inc. From Two Lawsuits
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LOS ANGELES--(BUSINESS WIRE)--July 31, 2000--The Entertainment
Internet Inc. (TEI) (EQS:EINI) announced Friday that it reached a
favorable resolution with the creditor who held, in the aggregate, the
largest prior claim relating to unpaid promissory notes executed by
its subsidiary corporation.
A preliminary agreement was made during mediation held on July 11,
2000, after nearly a year of litigation; the final agreement was
executed on Friday, July 28, 2000.
The structured settlement was facilitated in part by TEI director
Michael Zwebner, who supplemented the efforts of counsel by assembling
investors to eliminate two promissory notes held by Wendy Pachter,
which were the focus of her first lawsuit (BC 213855, July 21, 1999)
against TEI. Pachter and her husband, Ken Cronon, also filed a
separate lawsuit (BC 227511, March 31, 2000) against TEI, OMNI, and a
plethora of others. The accord requires Pachter and Cronon to dismiss
all of their claims against TEI, OMNI, all affiliated parties, and
their current attorneys with prejudice, but allows them to maintain
claims against OMNI's prior counsel, Jeffer Mangels Butler Marmaro.
TEI Chief Operating Officer Jeremy Schuster served as litigation
counsel in the state court action. Schuster said TEI was
fully prepared to defend the claim at the trial set for August 7,
2000, but was pleased with the resolution, which represents gain
through settlement of more than $100,000.
"Whenever we can write off at least thirty percent of a
significant liability, extend time for payment, and eliminate
litigation, it is a favorable event. With this settlement and one that
is on its third revision in another case, we will have eliminated
virtually all significant litigation for TEI," Schuster said.
TEI Co-chairman Mohamed Hadid said the corporation offered
"throughout the lawsuit" to engage in settlement discussions but its
requests were ignored or refused.
"I am pleased that Mr. Schuster and Mr. Zwebner were able to
resolve these matters, as the claims cost the corporation funds that
would have been better spent on growth of operations. This settlement
is a testament to their teamwork and a harbinger of good things to
come," said Hadid.
TEI Director Michael Zwebner said, "For investors to come to TEI,
the corporation must have a clean balance sheet and eliminate
liabilities to whatever extent is reasonably possible. The turnaround
plan framed by Mr. Hadid and Mr. Schuster shares this prudent
objective and is more than two-thirds completed." Zwebner said he
would continue to assist and provide the financial push necessary for
TEI to reach its planned goals.
Additional details of the settlement are expected to be disclosed
in the corporation's next quarterly filing with the Securities and
Exchange Commission.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This release contains forward-looking statements
involving risks and uncertainties that may cause actual future events
or results to differ materially and adversely from those described in
the forward-looking statements. Important factors that may cause such
a difference for The Entertainment Internet Inc. include, but are not
limited to, risks of delays in preparation and introduction of new
services; dependence on outside and third-party service providers,
consultants, and attorneys; dependence on third-party software
developers; risks of rapid technological change and platform change;
intense competition; risks of product defects; dependence upon
licenses from third parties; risks associated with present and future
capital requirements; dependence upon key personnel, and risks
associated with domestic business, intellectual property disputes and
other factors discussed in the company's filings from time to time
with the Securities and Exchange Commission. The Entertainment
Internet Inc. disclaims any obligation to revise or update any
forward-looking statement that may be made from time to time by it or
on its behalf.
CONTACT: The Entertainment Internet Inc.
Elizabeth Cantu, 323/857-9820 (Investor Relations)
info@eini.net |
