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CREDIT LYONNAIS LOSES BID TO DISMISS KERKORIAN SUIT

 LOS ANGELES, April 22 /PRNewswire/ -- The Los Angeles Superior Court on Wednesday cleared the way for Kirk Kerkorian's amended lawsuit against Credit Lyonnais seeking $675 million, plus punitive damages. As a result of the Court's decision, which rejected Credit Lyonnais' attempt to dismiss the lawsuit, the bank remains a defendant in the fraud, conspiracy and racketeering action brought in connection with Credit Lyonnais' lending activities to its long-time client Giancarlo Parretti. The amended lawsuit contains greater details concerning the fraud, conspiracy and RICO (Racketeering and Corrupt Organizations Act) allegations previously made by Kerkorian in an earlier suit filed in December. Attorneys for Kerkorian are currently in Paris taking testimony from a number of top Credit Lyonnais executives, including the bank's Chairman Jean-Yves Haberer.
 The suit says, Credit Lyonnais needed the 1990 merger between Pathe Communications and MGM/UA in 1990 "to close in order to protect its huge, precarious loan obligations to Pathe and affiliates of Giancarlo Parretti, the Italian financier and long-time client of Credit Lyonnais.
 "Without this merger, Pathe and its affiliates which also borrowed from Credit Lyonnais could not meet their loan commitments, causing their demise. From this, disastrous consequences also would have befallen Credit Lyonnais. Not only would Credit Lyonnais have faced a potential loss of hundreds of millions of dollars in bad loans, but the Credit Lyonnais banking entities would then encounter significant regulatory issues as a result of their failure to disclose to Dutch and French banking authorities the true nature and extent of their outstanding loans."
 The lawsuit states that the action "arises from a long-standing and far-reaching fraudulent scheme conceived and executed by the Credit Lyonnais `family' of financial institutions to conceal improper and unlawful banking practices from regulators and to defraud the creditors, shareholders, and affiliates of their client borrowers."
 "Had Credit Lyonnais not lied (to Kerkorian and others), the conditions required for the merger to close would not have occurred," the suit says. "If Pathe did not perform as promised and the merger did not close, Pathe would lose, at a minimum, $350 million in cash and a $75 million security interest previously granted by Pathe to MGM/UA and further would be subject to additional damages through claims by MGM/UA and its shareholders."
 The suit continues, "Immediately after the merger occurred, Credit Lyonnais began to loot the newly-merged entity. It gutted the company, diverting much needed cash from its operations and causing it to incur by Pathe, Parretti and their affiliated entities. ... In short, as with its other schemes, Credit Lyonnais saved itself at the expense of everyone else. ..."
 -0- 4/22/93
 /CONTACT: Michael Sitrick or Michael Kolbenschlag of Sitrick And Company, 310-788-2850/


CO: Credit Lyonnais ST: California IN: FIN SU:

EH -- LA031 -- 9496 04/22/93 13:10 EDT
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Publication:PR Newswire
Date:Apr 22, 1993
Words:463
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