Judge Upholds Parretti’s Ouster From the Board of MGM-Pathe : Entertainment: The ruling clears the way for its management team to try to get the studio back on its feet.

Giancarlo Parretti’s often bizarre fight for control of MGM-Pathe Communications Co. apparently ended Monday when a Delaware judge upheld his ouster from the studio’s board last June.

The ruling clears the way for MGM’s management team to try to get the studio back in gear.

“It’s like the sun coming up in the morning,” said an elated Charles R. Meeker, MGM president. He added that MGM has a number of promising distribution and co-production deals that are “literally just a handshake away” but could not be pursued while the legal cloud was still overhead.

Delaware Chancery Court Judge William Allen, in an 89-page ruling, found that Parretti had broken his contractual promise not to interfere with the struggling studio and that he “did not give truthful testimony when he testified under oath in this court” during a four-week trial last September.

Allen concluded that a subsidiary of French bank Credit Lyonnais, the studio’s largest creditor, was within its rights in removing Parretti and his wife, Maria Cecconi, from the MGM board in June after Parretti tried unsuccessfully to reinstate himself as chairman.

The ruling came as Parretti, a 50-year-old Italian financier, was being held in a top-security prison in Sicily, following his arrest in Rome Friday on tax-fraud charges.

MGM’s attorney, Howard Weitzman, said Allen’s action affirms the status of the team led by Chairman Alan Ladd Jr. as MGM’s rightful managers.

“The situation was clouded (by Parretti’s attempts to regain control), and now the cloud has been lifted,” Weitzman said in a telephone conversation from the Sun Valley, Ida., ski resort.

For Meeker, the ruling ends a strange chapter in his career. As the new management corps’ chief liaison with Parretti, he said he had a half dozen highly charged meetings with the financier last spring.

During the trial, he testified that Parretti had threatened him by saying: “You have to understand. I am crazy. I want you to understand, Meeker, that I am crazy. . . . I am very dangerous.”

Parretti’s Beverly Hills-based Pathe Communications Corp. purchased the historic studio last year from financier Kirk Kerkorian for $1.3 billion, renaming it to reflect the new ownership. In its heyday, MGM produced such Hollywood classics as “Gone With the Wind” and “The Wizard of Oz.”

Parretti proposed to expand MGM into an international entertainment empire, but his ambitious plans foundered on a sea of debt, much of it supplied by Credit Lyonnais.

Last April, as debts mounted and creditors threatened the studio with involuntary liquidation, Parretti agreed to turn over control to the bank.

It was that corporate governance agreement that was the subject of the legal fight decided Monday.

According to Weitzman, Allen’s ruling also affirms Credit Lyonnais’ position as legal holder of Parretti’s controlling shares in the studio’s parent company.

Parretti’s company disputes that, however. In a statement issued Monday evening, Pathe President Liliana Avincola said the ruling “does not affect Pathe’s continued ownership of 98.5% of the stock of MGM-Pathe” and “changes little in the (firm’s) current operations.”

Pathe said it will pursue its billion-dollar lawsuit against the Credit Lyonnais unit in Los Angeles Superior Court. The suit charges the bank with “a consistent pattern of bad faith in its dealings with Pathe and Parretti.”

Representatives of Credit Lyonnais could not be reached for comment late Monday.

Parretti, meanwhile, sat in prison in Brucola, Sicily, where he was transferred in chains after his arrest. He reportedly faces charges stemming from $235 million in unpaid taxes.

The Italian press reveled in Parretti’s troubles, with headlines such as “Handcuffs for the Fake MGM Lion-Tamer” and “Former Waiter in the Slammer.”

Weitzman, the studio’s lawyer, said he learned of the victory Monday afternoon on the ski slopes of Sun Valley, where, as he awaited a lift up the mountain, TV personality Cristina Ferrare informed him that he’d won the case.