Former Isis Theatre owners win ruling
December 10, 2007
ASPEN ” The former owners of the Isis Theater in Aspen have won the latest skirmish in their legal battle over millions of dollars in rent due them by the theater’s former operator.
But the battle is not over yet, according to an attorney in the case, and it could drag on for years more.
That’s because the Swedish company that backed the theater operator, Svensk Filmindustri, does not “have any physical presence in the United States, in any permanent sense,” said Denver-based attorney Jack Smith.
As a result, the Isis Litigation LLC cannot attack Svensk’s assets to satisfy the $8.5 million judgment that recently was ratified by the Colorado Supreme Court, Smith said.
The case arose out of the purchase and redevelopment of the Isis Theater, which was a funky, one-screen facility until it was purchased in the late 1990s by the Isis LLC Partnership, headed up by local resident Sam Houston. The group signed a lease with Resort Theaters of America (RTA), and remodeled the old building into a state-of-the-art, five-screen cinema that opened in late 1999. Svensk, which was part-owner of RTA, signed on as a guaranty of the lease.
Roughly a year later, RTA ran into financial trouble and declared bankruptcy, the Isis closed, and RTA rejected its lease. The theater currently is owned by the city of Aspen, and its four remaining screens are operated by a private partnership. One of the theaters has been converted to retail space.
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After Svensk refused to pay the outstanding rent on the RTA lease, the Isis group sued and won in local court. The late Judge T. Peter Craven awarded a judgment of more than $5.9 million in 2003, which, with interest, has grown to about $8.5 million.
Svensk appealed that judgment, and the Colorado Court of Appeals in 2007 ruled that Svensk must disclose its assets and financial affairs as the first step toward payment of the judgments. According to a statement issued on behalf of the plaintiffs in the case, the Isis group did manage to collect approximately $200,000 from some of Svensk’s partners in the U.S. ” including Sony, Janus Films and MGM ” but Svensk has yet to make any of the court-ordered payments.
In November of this year, according to Smith, the Supreme Court ruled that “Svensk must fulfill its obligation … if they want to do business in the United States.”
Referring to a recent reported purchase of about 40 magazines by Bonnier, a European media conglomerate that owns Svensk, Smith said in a statement, “They were able to pay hundreds of millions of dollars to buy a magazine group from Time Warner, so it is apparent that they have the resources to pay us, yet they act like deadbeats instead.”
Speaking for the Isis group, Sam Houston said on Friday, “We are pleased with the Supreme Court decision and urge Svensk to live up to their obligations. They have exhausted all their appeals and Isis has prevailed every time. It’s time to honor their agreements and the courts’ decisions.”