2 Ex-Lorimar Chiefs Deny Breach-of-Ethics Charge

Two former executives of the home video division of Lorimar-Telepictures Corp. who resigned this week said Thursday that they do not believe that their financial interest in one of the division’s suppliers amounted to a conflict of interest.

Court Shannon, executive vice president of the Irvine-based Karl-Lorimar Home Video unit, and Gary Hunt, vice president, resigned Wednesday, along with Stuart Karl, president and founder of the division.

The resignations, announced by Lorimar-Telepictures, came after the parent firm discovered possible “conflicts of interest” stemming from the executives’ financial relationship with a supplier, Continental Marketing Distributors of Torrance. Karl-Lorimar paid Continental to package and send promotional materials to home video distributors and retailers.

Karl remained unavailable for comment.

In a joint interview, however, Shannon and Hunt confirmed that they are directors and own “part” of Continental. Neither would comment on Karl’s involvement in Continental, other than to say that he did not have an ownership interest in the company.

Hunt and Shannon confirmed that Lorimar was never advised of their interest in Continental, although Shannon said that Karl knew of their interest in Continental.

According to Hunt, he and Shannon had “no fiduciary duty” to disclose the relationship. Shannon and Hunt would not give a specific reason for resigning. “We felt it would be the best decision for us,” said Shannon, who added that he, Hunt and Karl will make an announcement next week about their future plans.