European Investors Hint at a Move on Cannon : Group’s Displeasure With Film Maker’s Officers Surfaces in Filing With SEC

European financial backers of Cannon Group have given public notice that they may try “to obtain control” of the troubled Hollywood film maker.

In several parts of a new filing with the Securities and Exchange Commission, the Europeans imply that there may be friction between them and Cannon’s longtime top executives, Menahem Golan and Yoram Globus. The filing also reported structural changes in the Italian-Dutch-Spanish-Luxembourg group.

The group said it created a new Luxembourg entity, named International Participations S.A., to hold 2 million of its 2,482,840 Cannon shares. IP is a unit of Comfinance Inc., formerly Interpart S.A.

The European group has owned about 40% of Cannon since last year. Golan and Globus own about half as much stock as the backers, and some observers consider the Europeans to have working control already.

According to the filing, the European and Golan-Globus groups each have six representatives on the board, and the voting balance is in the hands of two directors listed as independent.

The filing also discloses a Dec. 5 agreement giving Golan and Globus the Europeans’ proxy to vote their shares for several proposals at the next annual meeting. However, it said no annual meeting has been scheduled.

One of the proposals would establish a “continuing executive committee” of Giancarlo Parretti and Frederic Scheer as “A” directors and Golan and Globus as “B” directors, with concurrence of one director from each group required to act.

Parretti and Scheer are from the European group, and Parretti holds the primary financial power in the Comfinance group.

Another indication of a rift or impasse in Cannon’s joint management includes a statement in the filing that Golan and Globus are no longer officers and directors of the European affiliate that holds Cannon stock.

Also, it states that Interpart (now Comfinance) “believes” that it is owed $11.6 million by Intercorporation S.A., a Luxembourg holding company. Intercorporation, previously reported to be 50% owned by Golan and Globus, had been the vehicle by which they and the Europeans were to restructure the film company.

No Cannon executives could be reached Wednesday for questions about the filing.

Lisbeth R. Barron, a research vice president at Balis Zorn Gerard, a New York securities firm, said the most surprising revelation in the filing was that 99% of the initial 887,000 Cannon shares that the Europeans reported purchasing between May 15 and June 5 last year were, in the words of the filing, “not settled,” apparently meaning that the sales were not completed.

Barron said she could not understand why the parties did not announce “that those shares were not actually purchased or were purchased by a different entity.”

Experience Questioned

The filing showed that the European affiliates had bought 1 million other Cannon shares for $4.3 million between last May 27 and Dec. 11 in open market transactions.

Barron advanced several theories about the group’s statement that it may seek control of Cannon.

One is that “the company (Cannon) is in such poor financial condition that it is close to filing for bankruptcy,” she said. A second is that the Europeans have decided they can’t turn the company around and hope to see a price rise so they can sell their stock.

“The third possibility,” Barron said, “is that they really do want to operate the company. (If so,) we question their lack of experience in the entertainment industry.”

She also said it appeared that the “stock swapping” and creation of new companies has done nothing to help Cannon’s operations or enable it to make better movies.