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Bank secretly sabotaged efforts to restructure and save MGM-Pathe.

Bank Secretly Sabotaged Efforts to Restructure and Save MGM-Pathe

"I don't like fighting against Credit Lyonnais, the only bank in the world that believed in me and gave me the money, but this is the situation: Credit Lyonnais first financed me and then decided to get rid of this long-ago ex-waiter to take over MGM.

Credit Lyonnais Bank Nederland (CLBN), the bank's subsidiary in the Netherlands, and I have worked together closely for years. Credit Lyonnais, for its own reasons, asked that I keep their support a matter between the bank and myself.

Whenever legally possible, I have respected the bank's wishes, despite the injuries I have suffered as a consequence. When the MGM/UA merger was pending and Credit Lyonnais pledged its support to me, it insisted on publicly denying its involvement.

I honored their request that I remain silent in the face of the ugly rumors about my sources of funds that circulated in the press. But I cannot remain silent as Credit Lyonnais tries to steal MGM-Pathe and blame officials in the Rotterdam office for supporting me.

CLBN operates fairly autonomously from its Paris headquarters. I have been working with that particular branch for a long time, and the bank has made a lot of money with me. It was the bank that introduced me to Cannon, which under my direction regained a solid financial position and emerged as one of the foremost international producers and distributors of action and adventure films.

When I presented to them a plan to buy and reshape MGM, they trusted and financed me. Yet now I find myself locked in a legal battle with Credit Lyonnais for control of MGM-Pathe, the finest film-making institution in the world.

I personally believe Credit Lyonnais is caving in to political pressure from French officials angered by my earlier acquisition of Pathe Cinema, considered by many to be a strictly French institution.

I also believe the bank was embarrassed by an apparent blunder made by them in the MGM/UA acquisition, where approximately $186 million of its debt was subordinated to MGM's public debt. Now the bank wants to seize control of MGM-Pathe and force its sale in order to get its money back.

They began to sabotage the deal by delaying funding of its credit line, holding up MGM-Pathe checks, and delaying interest payments on MGM debentures. This led directly to the inability of MGM-Pathe to pay its December public debt interest and the subsequent downgrading of MGM-Pathe's credit rating, and ultimately, the involuntary bankruptcy petition filed against MGM-Pathe in late March.

Bank representatives pressured me into signing more than 100 agreements, with the threat that if I didn't sign, they could push MGM-Pathe into bankruptcy. They told me not to worry, that the agreements were just for bank documentation. They also told me that I had until November 30 to lower the debt to the bank to $125 Million. Then they tried to get rid of me.

But, it isn't easy to get rid of Parretti. I'm fighting back.

It is difficult for me to sit back and listen to what they are saying about me, the lies and the misrepresentations. Going through the current trial, listening to the testimony of those I believed in and trusted but who are now fighting against me, is like seeing the middle of a movie. There was a beginning, and there will be an end.

There has been some very colorful testimony. So far, much of it has been filled with color, but very few facts. Some people say I am colorful. I am looking forward to my appearance to add facts. Facts are facts. And when the court has heard them all, when the whole story comes out, I am confident we will win."

This article has been written by Giancarlo Parretti, especially for Video Age International.
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Title Annotation:Credit Lyonnais, MGM-Pathe Communication Co.
Author:Parretti, Giancarlo
Publication:Video Age International
Date:Sep 1, 1991
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