DANCE

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Choreographer Michael Shawn has filed a $2.75 million lawsuit against the producers of "Legs Diamond," saying he was fired from the Peter Allen musical after he tested positive for the AIDS virus. The suit, filed in State Court in Manhattan, named Marvin Krauss, James M. Nederlander and several other producers of the flop musical which closed Feb. 19 at a loss of more than $5 million. Shawn, who had done the workshop production of the show in 1987, was hired to create new dances for "Legs Diamond" last April and had completed most of the choreography before entering the hospital Aug. 10 for tests. He was fired a week later after the producers confirmed he had tested HIV positive. He was replaced by choreographer Alan Johnson when the show went into rehearsal Aug. 29.

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