Parretti Reasserts MGM Claim; Judge Says He’s Out

On the same day that fallen financier Giancarlo Parretti reasserted from Italy his claim to the MGM studio, a Delaware judge confirmed the legality Monday of Parretti’s ouster.

The order by Delaware Chancery Court Judge William T. Allen affirmed that Parretti and his associates were removed lawfully as directors of Pathe Communications Corp., MGM’s parent, according to Craig Parsons, a spokesman for Pathe.

But in a statement faxed to reporters, Parretti announced that a magistrate in Rome had ordered, effectively, that Parretti be reinstated as the controlling shareholder of Pathe Communications and its operating company, MGM-Pathe Communications Corp.

In their own statement, Pathe and Credit Lyonnais Nederland, which loaned nearly a billion dollars for Parretti’s ill-fated purchase of MGM in 1990, denounced Parretti’s claim.

“Mr. Parretti’s actions in Italy are a blatant effort to mislead the Italian courts,” according to the Pathe-Credit Lyonnais statement. “His attempt to find a forum which will decide in his favor constitutes no more than an unfortunate international public relations game.”

Parretti was released in January after being jailed briefly on charges of conspiring to evade payment of more than $200 million in Italian taxes.

In his fax Monday, Parretti said: “I believe the magistrate’s order, which re-establishes a proper equilibrium between the two parties, is correct. I have always considered anomalous Credit Lyonnais’ conduct, who, after having only partially financed the acquisition of MGM . . . did not give (me) the time to reimburse them.”

Although current MGM officials disagree, Parretti added:

“One thing is certain, the story does not end here. From my side, there is and there always will be a great determination to defend my companies, but I am not seeking revenge.”

Parretti has no immediate plans to return to the United States and reassert operating control of MGM, according to his spokesman in Los Angeles.

For a wounded studio trying to persuade writers and directors that it can compete with Hollywood’s major studios, news of Parretti’s latest designs hurts “a little bit,” according to Steven E. Hill, an entertainment industry analyst for Sutro & Co.

Although he places little credence in the Italian magistrate’s ruling, Hill said any perception that Parretti could regain control “can do nothing but tarnish the image of MGM.”