Mgm Pathe Communications Co

The struggle for control of MGM-Pathe Communications Co. spilled into a Delaware courtroom Tuesday, with an Italian financier and a large French bank accusing each other of broken promises. Opening arguments began in a Delaware Court of Chancery, the state in which MGM is incorporated, in a lawsuit pitting the studio's former chairman, Italian investor Giancarlo Parretti, against its largest creditor, Credit Lyonnais Bank Nederland.

One of Hollywood's longest-running dramas goes on location today as the quest for control of economically troubled MGM-Pathe Communications Co. reaches a Delaware court. The trial, expected to last six days, pits former company Chairman Giancarlo Parretti against his chief financial backer, Credit Lyonnais Bank Nederland. The trial will determine the future course of MGM, which has been battered by a string of box office failures.

The battle over financially troubled MGM-Pathe Communications Co. intensified Monday as Giancarlo Parretti accused Credit Lyonnais Bank Nederland of sabotaging his efforts to run the studio, and Credit Lyonnais announced plans to broaden its control over Parretti's empire. Parretti's charges are contained in a complaint filed by his holding company, Pathe Communications Corp., with a Delaware court presiding over the dispute.

The big state-owned French bank Credit Lyonnais on Wednesday announced the early retirement of one senior executive and the transfer of another executive linked to controversial movie industry loans--including hundreds of millions to finance the takeover of the now-struggling MGM studio--from the bank's Dutch subsidiary.

The name Credit Lyonnais frequently showed up in the 1980s as credits rolled at the end of films. Once, a lending officer of the French government-owned bank was thanked by a producer accepting the Academy Award for best picture. Bank officers could approve film scripts and casting decisions on pictures, a rare right for a lender.

Giancarlo Parretti's turbulent tenure at MGM-Pathe Communications Co. ended bitterly Monday as the French banking giant that controls the company kicked him off the studio's board, charging that Parretti illegally tried to wrest control from MGM-Pathe's new management team.

A federal court judge in Los Angeles dismissed bankruptcy proceedings against MGM-Pathe Communications Co. on Thursday after the company reached a settlement with its creditors. Judge Arthur M. Greenwald ruled that the settlement fairly resolved the dispute between MGM and the court petitioners. He also noted that company cash-flow projections showing that MGM has the ability to pay all of its long- and short-term debt had not been legally challenged.

MGM, the movie studio that once spun out such sunny fare as "Meet Me in St. Louis," "The Wizard of Oz" and the "Andy Hardy" pictures, apparently still believes in happy endings. The beleaguered company has told a federal judge in Los Angeles that its financial problems can be resolved within a year once bankruptcy court proceedings are dismissed. In court declarations, MGM-Pathe Communications Co.