Lorimar Will Try to Resell Metrocolor

In an agreement with U.S. antitrust lawyers, Lorimar-Telepictures has promised to attempt to resell its Metrocolor film processing lab, according to papers filed in U.S. District Court here Tuesday.

Lorimar-Telepictures also pledged to keep the unit operating in the meantime. Metrocolor is one of Hollywood’s three biggest labs making the 35- and 70-millimeter prints shown in U.S. movie theaters.

The agreement was aimed at assuring Justice Department attorneys that Metrocolor would remain a competitor in the field.

MacAndrews & Forbes Group, owners of Technicolor, the largest U.S. film processor, also is a party to the agreement to postpone an early court hearing in the Justice Department’s new antitrust suit. The antitrust action last week halted the $72-million purchase of Metrocolor by a limited partnership, Processing Partners L-P, in which MacAndrews & Forbes is a limited partner.

Instead of a hearing this Friday on an injunction, lawyers for all the parties agreed to postpone it until Feb. 27.

Lorimar-Telepictures confirmed Tuesday that it already has been paid in full by Processing Partners and that the contract does not require Lorimar to pay it back. Shortly after the government blocked the sale with a restraining order last week, the parties announced that they “terminated” the sale agreement.

Under an unusual no-loss indemnification provision in the contract, MacAndrews & Forbes agreed to reimburse Lorimar for losses in operating the lab until it is sold or liquidated.

Lorimar said that if it sells Metrocolor, it must pay MacAndrews & Forbes the difference between its losses and the $60-million cash part of the purchase price.

MacAndrews & Forbes has already assumed a $12-million debt that Lorimar owed to Turner Broadcasting, which sold Metrocolor to Lorimar earlier this year.

The government obtained a restraining order last Friday that forbade Lorimar from closing or liquidating Metrocolor pending a hearing on a preliminary injunction.