MGM Holder Sues Kerkorian Over Stock Sale

A minority shareholder of MGM/UA Entertainment Corp. has filed suit in Los Angeles against principal stockholder Kirk Kerkorian, claiming he schemed to keep the lion’s share of United Artists when he sold its parent company to Turner Broadcasting.

Louis Brandt, who said he owned 180,000 shares of MGM stock in September, 1985, claims Kerkorian conspired to deprive minority shareholders of their equity in United Artists so that he could acquire it for himself at a bargain price.

Brandt, a resident of Miami Beach, filed his suit Thursday. Similar claims have been made in a Delaware class-action suit filed by MGM/UA minority shareholders against Kerkorian in February.

Brandt claims that as part of the $1.4-billion sale in March, Kerkorian extracted an agreement from Atlanta media magnate Ted Turner to sell United Artists to Kerkorian “at a bargain price”; the sale was later made for $480 million.

Assets Sold by Turner

In June, Turner sold MGM Entertainment Co. to United Artists for $300 million and also sold the 44-acre production facility and MetroColor Film Laboratory to Lorimar-Telepictures Inc. for $190 million.

Brandt claims Kerkorian offered MGM minority shareholders the option to buy one share of United Artists for each MGM share they held but structured the option to discourage stockholders from exercising it.

The owners of fewer than 20% of the 49.9% of publicly owned MGM/UA shares subscribed to that stock offer.

Kerkorian allegedly concealed the true value of United Artists, including an “undisclosed” agreement that UA would retain all the proceeds of the hit movie, “Rocky IV.”

Kerkorian could not be reached for comment on the suit.