Parretti-Cardinal Ties Cited, Court Told

Giancarlo Parretti told bank officials that he had lined up New York Cardinal John O’Connor and the Prince of Malta as investors to help him hang on to struggling MGM-Pathe, a bank official testified Tuesday.

Francois Gille, an officer of Credit Lyonnais Bank Nederland N.V., also said he was told that O’Connor had accepted in principal an invitation to be a member of the Pathe Communications Corp. board.

A spokesman for O’Connor, Joe Zwilling, said the cardinal never said he would be a board member or an investor in the company.

Parretti has been seeking investors to reduce his debt to Credit Lyonnais, which financed Parretti’s $1.3-billion acquisition of MGM-UA last November and is battling the Italian financier for control of the studio.

Parretti has until Nov. 30 to reduce his debt to the bank to less than $125 million. If he does not meet the deadline, the bank can sell 51% of MGM on Dec. 1. If he meets the deadline, he can be reinstalled as chairman.

Parretti reportedly owes the bank about $400 million.

Parretti faced creditors’ efforts to liquidate the studio when he agreed with Credit Lyonnais in April to stay out of MGM-Pathe’s business. In exchange for stepping aside, Parretti got money to rescue the studio from the bankruptcy liquidation effort.

The bank contends that Parretti reneged on the April agreement and has continued meddling in MGM.

Testimony in the non-jury trial is expected to end this afternoon.

Gille testified that Parretti also told him that Ahmet Ozal, the son of Turkish president Turgut Ozal, was a possible investor. Gille said Parretti told him that O’Connor was interested in investing $50 million.

Chancellor William T. Allen is being asked to decide whether Parretti reneged on the agreement to relinquish control.