One-Time Video King Back in the Game : Entertainment: Stuart Karl, who made a fortune on the Jane Fonda workout tapes and later was convicted of a felony, now heads up a Los Angeles production company.

Video entrepreneur Stuart Karl, who achieved fame and fortune with the Jane Fonda workout tapes and then suffered a series of reversals that included a felony conviction and bankruptcy, has returned to the video business as president of a fledgling Los Angeles production company.

Karl was named president of NAC Home Video, a unit of the closely held television production and record company Gold ‘N M Communications. Gold ‘N M Chairman Michael E. Marcovsky, himself a successful television and cellular telephone entrepreneur, said he hired Karl because of his “tremendous track record,” referring to him as “Mr. Home Video.”

Karl, who has been a consultant for NAC for several months, will head the company’s non-movie production efforts, such as a home video cassette of Thursday night’s Leonard-Duran prizefight.

Marcovsky said he was unperturbed by Karl’s ongoing legal and financial difficulties. Karl pleaded guilty last year to making $185,000 in illegal contributions to the political campaigns of Democratic presidential candidate Gary Hart and six congressmen. He was sentenced to three years probation and fined $60,000.

In July, Karl filed for Chapter 11 bankruptcy protection just as the Internal Revenue Service was preparing to auction off his 15,000-square-foot Newport Beach home for non-payment of $717,701 in federal taxes. Karl listed $3.9 million in debts in the bankruptcy petition, and no income or significant assets other than the home.

Documents in U.S. Bankruptcy Court in Santa Ana indicate that the Chapter 11 petition, which protects a debtor from creditors while a repayment plan can be worked out, was converted to Chapter 7 bankruptcy last month. Chapter 7 normally requires liquidation of assets to repay creditors, and the court has given permission for the home to be put on the market for $1.75 million.

Neither Karl nor his bankruptcy attorney could be reached for comment.

And Karl is still involved in a legal battle with one-time partner Lorimar Telepictures, now a unit of Time-Warner. Lorimar claims that Karl breached his fiduciary duties while running the Karl-Lorimar Home Video subsidiary by maintaining a financial stake in a company doing business with Lorimar. Lorimar has filed several suits against Karl and Karl has countersued, claiming the company owes him severance pay.

Records in the bankruptcy case show that Lorimar was awarded $116,118 in one of the cases, but the others apparently remain unresolved. The attorney representing Lorimar in the case declined to comment.

Karl, 37, achieved his first business success with a collection of trade magazines, and then achieved a spectacular coup in the budding home video business in 1984 when he persuaded Jane Fonda to record her workouts for sale on videocassette. Her effort became the best-selling non-movie tape ever made.

Suddenly the boy wonder of the video business, Karl sold his company to Lorimar in 1984 and joined the firm as head of the newly formed Karl-Lorimar Home Video unit. But in 1987, Lorimar forced him out of the job and sued for conflict of interest and violation of fiduciary duties.

At the same time, federal investigators were looking into irregularities in Gary Hart’s 1984 presidential primary campaign in California, and Karl was one of the targets. After being indicted for illegally funneling funds to Hart and other candidates--in part by having employees make contributions and then reimbursing them in order to avoid the $1,000 limit on contributions--he agreed to plead guilty to one felony and one misdemeanor count.

But all through Karl’s travails, friends and family members--Karl is married and has two small children--predicted he would eventually make a comeback. In his new post, he will have a chance to show whether he is the video visionary some proclaimed him to be, or a flash in the pan who blew his one big break.