Bank Forecloses on MGM-Pathe Stock : * Bankruptcy: Credit Lyonnais takes ownership of 98.5% of the company’s shares to counter claims by Parretti.

Credit Lyonnais, the French government bank that is MGM-Pathe Communications Co.’s primary lender, said Thursday that it is foreclosing on 98.5% of the movie company’s stock to sever any remaining ownership claim by Italian financier Giancarlo Parretti.

Parretti, ousted last year from operating control of MGM, contends in litigation he initiated in Rome last month that he continues to own the stock. A judge in Delaware subsequently affirmed that the new management of MGM and its parent firm already hold voting rights to those shares.

One effect of the foreclosure would be to clear Credit Lyonnais’ ownership title to MGM, eliminating a potential obstacle to a future sale. Parretti, with the bank’s backing, bought MGM in November, 1990.

Credit Lyonnais, in a written statement, noted that the stock was offered as collateral for its substantial loans to MGM; to its parent, Pathe Communications Corp., and to other “related entities.” The total loans made by Credit Lyonnais for the acquisition and ongoing operation of MGM have been estimated to exceed $1 billion.

The statement stressed that the bank believes that its foreclosure will enhance the effectiveness of the studio’s new management.

To foreclose on the stock, Credit Lyonnais is required by law to hold a public auction. The bank said that it would bid “at least” $400 million--all of which it already is owed by MGM and Pathe--at the May 7 auction in Wilmington, Del.