Producer Amends His Suit Over Pathe’s Buyout Plans

The producer of such films as “Last Tango in Paris” and “The Good, the Bad and the Ugly” claimed in a lawsuit that Pathe Communications Corp. will finance its pending acquisition of MGM/UA Communications Co. partly by selling television rights to MGM/UA films abroad for unusually frequent airings at cut-rate prices.

The producer, Alberto Grimaldi, also claimed that Pathe’s plan to sell various rights in 1,000 MGM/UA films to Turner Broadcasting System Inc. and Time Warner Inc. for at least $325 million will deny profit participants of their share in the films.

The claims came in an amendment to Grimaldi’s New York federal court suit opposing Pathe’s earlier plan to finance its $1.3-billion acquisition of MGM/UA with $650 million in backing from Time Warner. A Pathe spokesman said his company continues to dispute Grimaldi’s claims.

In the new filing, Grimaldi contended that Credit Lyonnais Bank Nederland will lend as much as $650 million to Pathe and will recoup its money from payments for film rights sold in Spain, France, South Korea, Japan and elsewhere. He also claimed that the financing arrangement would render MGM/UA “insolvent” and unable to pay any judgment against it. MGM/UA has said it received a favorable solvency opinion from independent appraiser Houlihan, Lokey, Howard & Zukin Inc.

Pathe is expected to close its long-running buyout today.